ECONOMIC SURVEY
2 April 1996
(Communicated by GPO Economics Desk)
MACRO-ECONOMIC SECTOR:
* DECREASE IN DEFENSE SPENDING AS PROPORTION OF GDP IN 1995.
Israel's defense spending decreased to 12% of the country's Gross Domestic
Product in 1995, compared to 13% of its GDP in 1994, the Central Bureau of
Statistics reported. Defense spending was $31.8 billion in 1995, compared
to $28.6 billion in 1994. Defense spending is defined as wages, the value
of work done by conscripted soldiers, procurement costs of goods and
services, emergency storage and maintenance costs, and payments to reserve
duty soldiers for the time they serve. Direct defense spending actual
wage and goods and services procurement costs in 1995 fell by 3% to
$25.8 billion, after a drop of 9% in 1994.
Central Bureau of Statistics - David Neumann, 972-2-6553400
* FOREIGN CURRENCY RESERVES FALL BY $199 MILLION IN MARCH.
Israel's foreign currency reserves fell by $199 million to $9.697 billion
in March 1996, the Bank of Israel reported. The central bank reported that
the drop was entirely due to funds transferred abroad by the Government.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712
* ISRAEL'S INTERNATIONAL ECONOMIC RATING IMPROVES.
Israel's international economic rating improved by one place to 41 out of
133 countries, according to the American financial magazine, Institutional
Investor. The same issue of the magazine reported that Israel was only one
of 17 countries whose credit rating rose during the past six months.
Finance Ministry - Eli Yosef, 972-2-317201
GOVERNMENT SECTOR:
* GOVERNMENT TO RAISE $750 MILLION ON EUROBONDS MARKET IN MULTI-YEAR
PROGRAM.
Israel is planning to raise $750 million on the Eurobonds market in the
coming years, the Finance Ministry announced. During 1996, the ministry
said it expected to raise $200 million independently from support or
guarantees from other governments. The ministry reported that it was
turning to the Eurobond market in order to have greater flexibility in
raising money less expensively on foreign markets.
Finance Ministry - Eli Yosef, 972-2-317201
* GOVERNMENT FIRST QUARTER BUDGET DEFICIT WAS NIS 3.041 BILLION.
The Government's budget deficit for the first three months of 1996 was NIS
3.041 billion, the Finance Ministry reported. For the period, government
expenses were NIS 30.6 billion, while income was NIS 27.6 billion. For the
month of March, early indicators show the budget deficit to have been NIS
93 million.
Finance Ministry - Eli Yosef, 972-2-317201
PEACE ECONOMICS:
* BUSINESSMEN ACCOMPANY PRIME MINISTER ON VISIT TO OMAN AND QATAR.
President of the Israel Manufacturers Association and Chairman of Osem
Industries Dan Propper, President of the Federation of Israeli Chambers of
Commerce Danny Gillerman, and Director-General of the Finance Ministry
David Brodet, are part of Prime Minister Shimon Peres' entourage on his
two day visit to Oman and Qatar, 01-02.4.96. During the visit, it is
expected that Israel and the two Gulf states will be able to reach a
number of agreements in the business and trade spheres.
Prime Minister's Office - Aliza Goren, 972-2-705555
KIBBUTZ SECTOR:
* KIBBUTZ INDUSTRIES SALES UP 16% IN 1995.
The approximately 400 kibbutz industries showed an increase in sales of
16%, to NIS 9.5 billion, according to early figures released by the
Kibbutz Industries Association. Export sales by kibbutz industries rose
26.6% to reach $1.04 billion. In 1995, investment in kibbutz industries
were delayed due to problems associated with uncertainty regarding the
kibbutz debt agreement negotiated by the government, the banks, and the
kibbutzim.
Kibbutz Industries Association - Micha Hertz, 972-3-6955413
PRIVATIZATION:
* INTERNATIONAL PUBLIC OFFERING OF ZIM POSTPONED.
Zim Israel Navigation Lines, Israel's main shipping company, had its
planned international public offering in New York postponed by its co-
owners, the Government Companies Authority and the Israel Corporation.
Reasons for the cancellation of the offering are a drop in Zim's 1995
profits, which fell by 45% to $14.8 million in 1995, and the non-conducive
atmosphere for offering shipping concerns.
Finance Ministry - Eli Yosef, 972-2-317201
PRIVATE SECTOR:
* EL-OP TO SUPPLY DANISH AIR FORCE WITH IMAGING EQUIPMENT FOR F-16s.
El-Op, the imaging technologies firm located in Rehovot, will supply the
Danish air force with a new generation of specialized imaging equipment
for its F-16 planes currently undergoing renovations. The deal is
reportedly worth tens of millions of dollars for the equipment, which was
originally developed by El-Op for its satellite program. El-Op will
cooperate with the Danish firm, Per Udsen in refurbishing the planes.
(Globes, 01.04.96, p.14)
DELEGATIONS:
* CHINESE FINANCE MINISTER VISITS.
Chinese Finance Minister Liu Zhongli visited Israel last week, and met
with government officials and members of the private sector. He met with
senior officials at the Finance and Industry and Trade ministries, the
Bank of Israel, and with businesspeople at ECI Telecom, Elscint, the Dead
Sea Works and Shoul Eisenberg's UDI.
Finance Ministry - Eli Yosef, 972-2-317201