ECONOMIC SURVEY - 26-Jul-95

26 July 1995

(COMMUNICATED BY GPO ECONOMICS DESK)

GOVERNMENT SECTOR:

* BUDGET MEETINGS CONTINUE BETWEEN PRIME MINISTER, FINANCE MINISTER, AND IDF STAFF.
Meetings between the Prime Minister, officials from the Finance and Defense Ministries, and senior IDF officers, are continuing this week in an effort to arrive at an agreed position concerning the defense budget for 1996. The Finance Ministry would like to continue to reduce the deficit's percentage of GDP to 2.5% from 1995's figure of 2.75% and is therefore pushing to cut NIS 2.5 billion from the Government's budget. Due to the cost of peace, most prominently the cost of redeployment in the territories, the cuts proposed by the Finance Ministry and the requirements proposed by the Defense Ministry have not yet been reconciled, leading to these additional meetings with the Prime Minister.
(Ha'aretz, 26.7.95)

FOREIGN TRADE:

* TELRAD WINS 1994 OUTSTANDING EXPORTER AWARD.
Telrad Telecommunications and Electronics Industries will be awarded the 1994 Outstanding Exporter Award in a ceremony to be held on 31.7.95, at the President's residence. In 1994, the Lod-based company had exports valued at over $155 million. Other local firms to receive export achievement awards at the ceremony include: LED Diamonds, Electra Consumer Products, Elta Electronics Industries, Arad Irrigation, Lachish Industries, Lanoptics, Avko Chem, Reviv Precise Plastic Products, Taste of Israel, Abu Ghosh Textile Industries, and Rachel Levi Diamonds.
Industry and Trade Ministry - Avital Ber, 972-2-220340

MACRO-ECONOMIC SECTOR:

* RETAIL CHAIN STORE SALES INCREASE AT ANNUAL RATE OF 17% DURING SECOND QUARTER OF 1995.
Retail chain store sales increased by a monthly average of 1.3% during the second quarter of the year, equivalent to an annual rate of 17%, the Central Bureau of Statistics reported. Second quarter sales, together with those from the first quarter - a combined increase of 22% at an annual rate - indicate an increase of 7% in retail chain store sales rate compared to the first half of 1994. Retail chain stores' food sales, which account for approximately 30% of all consumer food sales, rose by 10% during the first half of the year compared to corresponding period in 1994.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* INDUSTRIAL PRODUCTION RISES BY 8% DURING FIRST FOUR MONTHS OF 1995.
Industrial production rose by 8% during the first four months of 1995 - close to 20% at an annual rate - the Central Bureau of Statistics reported. Except for the publishing and the vehicle sectors, all industrial sectors showed an improvement compared to the first four months of last year. The number of salaried workers employed in industry rose by 2.7% during the first four months of the year - an additional 10,000 workers.
Central Bureau of Statistics - David Neumann, 972-2-6553400

TOURISM:

* MORE THAN 1 MILLION TOURISTS ARRIVE IN ISRAEL DURING FIRST HALF OF 1995.
Just over 1 million tourists arrived in Israel during the first half of 1995, an increase of 18% compared to the same period in 1994, according to the Central Bureau of Statistics. An increase in both air and sea arrivals was recorded during the period.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* GOVERNMENT APPROVES NIS 295 MILLION TOURISM DEVELOPMENT PLAN FOR NAZERETH.
The Government has approved a four year investment program of NIS 295 million to assist in the preparation for the 2,000 anniversary of Christ's birth to be celebrated in Nazereth. The budget will be used to improve tourism infrastructure including the addition of new hotel rooms, new walking paths, neighborhood improvements, and training personnel in the city which the Tourism Ministry estimates approximately 2 million will visit in 2,000. Currently 60% of all tourists visiting Israel visit Nazereth.
Tourism Ministry - Orly Doron, 972-2-754845

BUSINESS SECTOR:

* NESTLE ACQUIRES OPTIONS TO PURCHASE 10% OF OSEM INDUSTRIES FOR $44 MILLION.
Swiss-based multinational food giant Nestle, signed an agreement with Osem Industries to purchase options for acquiring 10% of Osem's equity for $44 million, on 18 July 1995. According to the agreement, Nestle will cease importing its products through a number of importers and grant Osem exclusive importing rights for all Nestle products. Nestle must exercise its options by 19.7.96. Osem's other major shareholders include Claridge Israel, controlled by Canada's Bronfman family, the Propper family, and the Klein family. (Globes, 19.7.95)

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