ECONOMIC SURVEY - 05-Aug-96

(COMMUNICATED BY GPO ECONOMICS DESK) August 5, 1996

MACRO-ECONOMIC SECTOR:

* PRIVATE SECTOR UNILATERAL TRANSFERS FROM ABROAD INCREASE BY 8.2% DURING FIRST HALF OF 1996.
Private sector unilateral transfers from abroad were $2.377 billion during the first half of 1996, an 8.2% increase in comparison to the first half of 1995, the Bank of Israel reported. The largest component of these transfers were gifts and contributions of $1.259 billion (just over 52%); followed by tax-exempt transfers mostly by new immigrants and returning citizens of $699 million (29%), and World War II reparations of $419 million (17.6%). Unilateral transfers from Israel to abroad also increased during the first half of the year to $131 million, compared to $103 million during the same time last year. Private sector unilateral transfers amount to almost two-thirds of all transfers from abroad. During 1995, a record $7 billion were recorded in unilateral transfers.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

* BALANCE OF TRADE DEFICIT INCREASES BY $600 MILLION TO $5.75 BILLION IN FIRST HALF OF 1996.
Israel's balance of trade deficit increased by $600 million to $5.75 billion during the first half of 1996, the Central Bureau of Statistics reported. Increases in trade deficits were recorded with the United States

(+70%), the EU (+8.5), and with the EFTA countries (+4%), while a decrease in the trade deficit was recorded with the Asian countries (-15%), and a balance of trade surplus was recorded with Eastern European countries. The balance of trade deficit with the U.S. for the first half of the year was $300 million, while the balance of trade surplus with it was $480 million in 1995.
Central Bureau of Statistics - David Neumann, 972-2-6553400

GOVERNMENT SECTOR:

* ISRAEL SIGNS FREE TRADE TREATY WITH CANADA.
On 30.07.96, Industry and Trade Minister Natan Sharansky and Canadian Minister of International Trade Art Eggleton, signed a Free Trade Area Treaty between Israel and Canada. The treaty due to go into effect in January 1997 provides for the removal of all customs on industrial goods and provide substantial benefits on agricultural and processed-food goods. Negotiations on the treaty began in 1994 and will help Israel develop closer trade relations with Canada, especially in the wake of the NAFTA Agreement.
Industry and Trade Ministry - Haya Peri, 972-2-220340

* GOVERNMENT DEFICIT IS NIS 6.5 BILLION SINCE BEGINNING OF 1996.
The Government's deficit for the first seven months of 1996 came to NIS 6.5 billion, following July's deficit of NIS 873 million, the Finance Ministry reported. However, since the beginning of the year, government income from taxation has grown by approximately 3%, in comparison to tax revenues generated for the first seven months of 1995.
Finance Ministry - Eli Yosef, 972-2-317201

* U.S. UNDER-SECRETARY OF COMMERCE EIZENSTAT VISITS. United States Under-Secretary of Commerce for International Trade Stuart Eizenstat is currently on a three-day trip to Israel in order to advance trade issues between Israel and the U.S. Eizenstat who coordinates issues related to the Middle East peace process for the Department will also be making a tour of proposed sites for the joint Israeli-Palestinian Authority industrial zones.
Industry and Trade Ministry - Haya Peri, 972-2-220340

ENERGY SECTOR:

* ISRAEL ELECTRIC CORPORATION COMPLETES INSTALLATION OF EXPERIMENTAL WIND TURBINE FOR ELECTRICITY PRODUCTION.
The Israel Electric Corporation has completed the installation of an experimental wind turbine at Kibbutz Ma'ale Gilboa for the production of 500 kilowatts of electricity. The company said it plans to install 50 wind turbines imported from the Netherlands on the kibbutz in order to produce 50 million kilowatts per hour annually.
Israel Electric Corporation - Yael Ne'eman, 972-3-5605101

PEACE ECONOMICS: