ECONOMIC SURVEY - 16-Aug-95

16 August 1995

(Communicated by GPO Economics Desk)

MACRO-ECONOMIC NEWS:

* TRADE DEFICIT CONTINUES TO GROW.
Israel's trade deficit grew by $858 million during July to reach $6.67 billion for the first seven months of 1995, the Central Bureau of Statistics reported. Seasonally adjusted figures show July's trade deficit to be $919.7 million, an increase of 37% over June's trade deficit. July's exports, seasonally adjusted and excluding ships, aircraft, and diamonds, were just over $1 billion, while July's seasonally adjusted imports, excluding ships, aircraft, and diamonds were just over $2 billion.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* JULY CONSUMER PRICE INDEX UP BY 0.2%.
On 15.08.95, the Central Bureau of Statistics announced that the Consumer Price Index rose by 0.2 % in July. This represents an annual inflation rate lower than the 8%-11% which the Treasury had predicted for the year.
Central Bureau of Statistics - David Neumann, 972-2-6553400

GOVERNMENT SECTOR:

* $4.6 BILLION IN INVESTMENTS APPROVED OVER PAST THREE YEARS.
$4.6 billion in investments for industrial projects have been approved during the past three years, according to statistics released by the Israel Investment Center of the Industry and Trade Ministry. During the three year period from July 1992 to May 1995, 1,559 industrial projects were approved by the center. During this period, 125 tourism-related projects, worth $970 million were approved. The center also reported that 311 real estate rental projects, worth $884 million, were approved during the period. Moshe Dovrat, Director of the Israel Investment Center, reported that he expects more projects to be approved in the coming years due to growing interest in investment by foreigners.
Israel Investment Center - Moshe Dovrat, 972-2-220373

* DISCUSSIONS WITH THE UNITED STATES AND CANADA HELD ON AGRICULTURAL AND PROCESSED FOOD TRADE.
Discussions with representatives from the United States Trade Representative's Office on issues surrounding importing U.S. Agriculture and processed food products were held earlier this month, the Industry and Trade Ministry reported. The talks were held in an attempt to resolve disagreements concerning the extent of openness of the Israeli market to these products arising from conflicts between the GATT Agreement Uruguay Round Treaty, which Israel signed, and the Free Trade Area Agreement between Israel and the U.S. The parties agreed, that despite their disagreements, they would both attempt to find a mechanism which would respect the needs of both sides and increase trade. In Ottawa, Israeli negotiators met with their Canadian counterparts on agriculture trade issues, as part of the negotiations on signing a Free Trade Area agreement. In principle, both sides agreed that a list of products, on each side, would be drawn up which would enjoy lowered quotas and other benefits. They also decided to create a mechanism to resume the process later, to include additional food and agricultural products. The Ministry reported that it is hoping to achieve an FTA agreement with Canada by the beginning of 1996.
Industry and Trade Ministry - Dr. Gabriella Cohen, 972-2-220262

* DEFENSE MINISTRY DEMANDS ADDITIONAL BUDGET OF NIS 1.5 BILLION FOR 1996- 97.
The Defense Ministry and the IDF are requesting an addition of NIS 1.5 billion to the defense budget NIS 600 million in 1996 and NIS 900 million in 1997 in order to pay for IDF redeployment on the West Bank. These supplements are in addition to the earlier NIS 850 million supplemented to the 1996 defense budget. The Finance Ministry is demanding the Defense Ministry reduce NIS 650 million from its 1996 budget. The Government did not reach a decision on these issues during its special cabinet meeting on 13.8.95. (Globes, 13.8.95)

TOURISM:

* PRIME MINISTER'S CONFERENCE ON PEACE TOURISM IN SEPTEMBER.
The Prime Minister's Conference on Peace Tourism, the concluding event of the Tourism Ministry's Year of Peace campaign, will be held from 5-9.9.95 at the Tel Aviv Hilton. Participants from 30 countries, including heads of international tourism industries are expected to attend. PM Rabin as well as other senior officials are scheduled to address the conference, which will focus on regional and local tourism opportunities.
Tourism Ministry - Orly Doron, 972-2-754845/6

* ECONOMICS RESEARCH ASSOCIATES WINS INTERNATIONAL TENDER TO PLAN BIBLE STORIES ENTERTAINMENT PARK.
Economics Research Associates's London office, was awarded a tender to plan an entertainment park, under the auspices of the Tourism Ministry and Israel Lands Authority based on Bible stories and Jewish History. The tender, to be completed within one year, includes conducting a feasibility study, planning an overall program for the park. ERA, which has conducted studies for Disney World and Universal Studios among others, was established by the Walt Disney Corporation.
Tourism Ministry - Orly Doron, 972-2-754845/6