ECONOMIC SURVEY - 14-Nov-95

14 November 1995

(Communicated by GPO Economics Desk)

GOVERNMENT SECTOR:

* FINANCE MINISTRY: ISRAEL'S ECONOMIC PROSPECTS HAVE NOT BEEN DAMAGED BY THE ASSASSINATION OF LATE PRIME MINISTER YITZHAK RABIN.
Israel's economic growth will not be adversely affected by the assassination of the late Prime Minister Yitzhak Rabin, according to Finance Ministry Director-General David Brodet. He said that the facts point to continued support for Israel. "About 10 days ago, Moody's gave Israel a rating equal to A- an improvement over the BBB+ rating we currently hold for our upcoming issue of Yankee bonds. The fact that they did not change this after late the Prime Minister Rabin's assassination, points to the confidence that the financial markets have in Israel," he said on Tuesday, 14.11.95. Brodet also noted that the DM350 million ($250 million) international bank syndicate loan will proceed as planned on Thursday, 16.11.95. "There have been no changes in terms, period, or participation in the syndicate, which is led by Bank Leumi

(London) and Chemical Bank," Brodet said.
Finance Ministry - Eli Yosef, 972-2-317201

* U.S. APPROVES ISRAEL USING LOAN GUARANTEES TO FINANCE BUDGET DEFICIT.
On 8 November, the U.S. Government approved a Memorandum of Understanding which allows Israel to use loan guarantee funds for financing its budget deficit. This follows an agreement reached at the initiative of the late Prime Minister Rabin, in his meetings with U.S. President Bill Clinton while the former was in Washington for the signing of the Oslo II Agreement. Until now, Israel was able to use $900 million of the loan guarantees, annually, for this purpose. The approval will allow Israel to reduce the amount of funds it raises on Israel's capital markets, and means that Israel can use the funds as a financial tool for dealing with the Government's budget deficit, according to Finance Ministry Director-General David Brodet.
Finance Ministry - Eli Yosef, 972-2-317201

* ISRAEL'S GDP IN 1995 $87 BILLION, GDP PER CAPITA $15,500.
Israel's Gross Domestic Product in 1995 will reach $87 billion and the GDP per capita will be $15,500, according to Finance Ministry Director General David Brodet. Brodet said that during the past six years (1990-95) Israel's GDP has grown at an average of 6% annually, and this has brought the country to be in 18-19th place among the wealthiest per capita in the world. By the end of 1995, Israel will have absorbed approximately 700,000 new immigrants, said Brodet, and the burden in direct and related expenses is $3.5 billion annually in housing, welfare, education, health, and infrastructure. In 1996, Israel's exports are projected to grow by 8%, unemployment will fall to 6.2% (from 6.5% in 1995), immigration will continue at a rate of 70,000 annually, and the inflation rate will remain steady.
Finance Ministry - Eli Yosef, 972-2-317201

* MORE WOMEN APPOINTED TO BOARDS OF DIRECTORS OF GOVERNMENT CONTROLLED COMPANIES.
Since August 1993, when the Ben Dror Committee responsible for appointing directors of public companies began functioning, it has appointed 580 directors, of which 196, or 25%, were women. In 1995, of 250 appointments, 122, or 32.8%, have been women. Currently, 19.8% of all directors in state owned companies are women. Before the Ben Dror committee began operating, only 3% of all directors appointed by the Government were women.
Finance Ministry - Eli Yosef, 972-2-317201

* BUDGETED REDEPLOYMENT COSTS: GAZA AND JERICHO - $300 MILLION, WEST BANK - $800 MILLION.
The costs of the IDF redeployment in the territories, as budgeted by the Finance Ministry, are $300 for redeployment in Gaza and Jericho, and $800 million in the West Bank. This includes direct and indirect costs. The costs for the West Bank are budgeted for 1995, 1996, and 1997.
Finance Ministry - Eli Yosef, 972-2-317201

MACRO-ECONOMIC SECTOR

* REAL FOREIGN INVESTMENT WILL REACH MORE THAN $1 BILLION IN 1995.
Real foreign investment, not including investments in the capital markets, will reach over $1 billion in 1995, according to the Finance Ministry. This compares with real foreign investment of $600 million in 1994, $300 million in 1993, and $100 million annually in earlier years. Real foreign investment in 1996 is projected to be equal to that of 1995.
Finance Ministry - Eli Yosef, 972-2-317201

* 97% OF ALL BUSINESSES OPERATING IN ISRAEL ARE SMALL ENTERPRISES.
97% of all businesses operating in Israel are small enterprises, according to the Federation of Israeli Chambers of Commerce. Approximately 130,000 small enterprises are operating in the private sector. The FICC released these figures in the run-up to the International Small and Medium Sized Enterprises Congress which is being held this week in Tel Aviv.
Federation of Israeli Chamber of Commerce - Linda Shimon, 972-3-5631010

* ISRAEL'S POPULATION HAS GROWN BY 20% SINCE 1990.
Israel's population has grown by approximately 20% since the beginning of 1990, reaching 5.6 million in November 1995, according to the Central Bureau of Statistics. 81% of the population is Jewish, 14.4% Muslim, 2.9% Christian, and 1.7% Druze and others. 30% of the population is under the age of 14, while 9.5% is over the age of 65. The average fertility rate