ECONOMIC SURVEY - 02-Jan-96

2 January 1996

(COMMUNICATED BY GPO ECONOMICS DESK)

MACRO-ECONOMIC SECTOR:

* EARLY 1995 ECONOMIC INDICATORS SHOW GROWTH OF 7% IN GROSS DOMESTIC PRODUCT.
Israel's Gross Domestic Product is expected to rise by 7% in 1995, compared to 1994, according to early economic indicators released by the Central Bureau of Statistics. Israel's GDP per capita will rise by 4% in 1995, and the country's business sector's growth will be up by 8%, in comparison to 1994. The industrial sector's activity will rise by 8%, while construction sector activities will grow by 12%, compared to 1994. Revenues from tourism are expected to rise by 15% in 1995, compared to 1994. A slowdown in exports is expected in 1995 with growth of only 9%, compared to 11% in 1994 and 15% in 1993. This is mainly due to a slowdown in industrial exports, which will rise by 3-4%, following growth of 11% in 1994 and 17% in 1993.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* CURRENT ACCOUNTS BALANCE OF PAYMENTS DEFICIT TO BE $5.1 BILLION IN 1995.
Early economic indicators show that Israel's current accounts balance of payments deficit will be $5.1 billion at the end of 1995, after taking into account unilateral transfers which were received during the year. This reflects a delay in receiving the full amount of civilian aid from the United States. Israel has received $250 million of $1.2 billion since the beginning of the fiscal year in the U.S.; is expected to receive the remaining $950 million soon. If the aid from the U.S. had been received on time, as it has regularly come, Israel's current accounts balance of payments deficit would have been $4.5 billion.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* ISRAEL'S FOREIGN CURRENCY RESERVES DECREASE TO $8.15 BILLION AT END OF DECEMBER.
Israel's foreign currency reserves fell by $113 million, to $8.15 billion, at the end of December 1995, compared to November 1995, the Bank of Israel reported. At the end of 1994, the country's foreign currency reserves were $6.81 billion, and reached a high of $9.62 billion at the end of May 1995.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

GOVERNMENT SECTOR:

* PRIME MINISTER PERES: EDUCATION SPENDING EQUALS DEFENSE SPENDING.
For the first time in the country's history, education spending almost equals the size of defense spending, Prime Minister Shimon Peres told an audience at the opening of the Education in Israel exhibition, this week in Jerusalem. According to Education Minister Amnon Rubinstein, education spending rose by 74% during the past three years and 300,000 more study hours were added to the system.
Education Ministry - Yehoshua Amishav, 972-2-292739

* 1996 BUDGET PASSES INTO LAW.
The Government's budget for 1996 passed into law early Friday morning, 29.12.95 by a vote of 52 for, 36 against, with 5 abstentions. The official budget, NIS 172.772 billion, passed after more than an 80-hour filibuster and debate, primarily regarding the supplementary Economic Arrangements Law, used for special budgetary needs.
Finance Ministry - Eli Yosef, 972-2-317201

FOREIGN TRADE:

* POLISHED DIAMOND EXPORTS RISE 11% IN 1995.
Exports of polished diamonds roes by 11% in 1995 to $3.845 billion, up from $3.462 billion in 1994, the Ministry of Industry and Trade reported. Imports of raw diamonds for 1995 totalled $686 million, an increase of 49% from $460 million in 1994. The leading recipients of exported polished diamonds were the United States, 40.9%; Japan, 20.5%; Hong Kong, 16.7%, and Belgium, 9.7%.
Industry and Trade Ministry - Tzafrir Inbar, 972-2-220390

PEACE ECONOMY

* OFFICIAL DELEGATION FOR AGRICULTURAL JOINT PROJECTS VISITS QATAR.
An official delegation from the Foreign and Agriculture Ministries visited Qatar at the end of December 1995 to discus joint projects in the agriculture sphere. Among the projects discussed were: improving tree nurseries, improving water quality, promoting desert agriculture, and improving sheep husbandry. The delegation will prepare a report for the Qatari government to help it make a decision concerning the future development of these projects.
Foreign Ministry - Danny Shek, 972-2-303343

* MIDDLE EAST TOURISM ORGANIZATION TO HOLD MEETING IN BETHLEHEM 3-4.1.96.
MEMTTA, the Middle East and North Africa regional tourism organization, will hold a two day meeting at Bethlehem's Paradise Hotel beginning, 3.1.96. Participating in the conference will be Israel, Jordan, Egypt, Tunisia, Morocco, Turkey, Cyprus, and the Palestinian Authority, as well as observers from the United States. Officials from the Tourism Ministry will represent Israel, as will a number of private sector representatives.
Tourism Ministry