ECONOMIC SURVEY - 06-Nov-96

6 November 1996

(COMMUNICATED BY GPO ECONOMICS DESK)

MACRO-ECONOMIC SECTOR:

* ECONOMIC GROWTH SLOWS IN APRIL-SEPTEMBER.
Economic growth slowed down between April and September (inclusive), according to the Bank of Israel's Department of Research. This slowdown was a continuation of the slowdown in domestic supply which accompanied a slowdown in the growth of demand. In the wake of these developments, the balance of payments, the balance of trade, and the rate of inflation were all positively affected.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

* FINANCIAL INVESTMENTS BY FOREIGN CITIZENS INCREASE BY 7.3% DURING FIRST EIGHT MONTHS OF 1996.
Financial investments in Israeli financial assets by foreign citizens grew by 7.3%, or $1.3 billion, to $19.5 billion during the first eight months of 1996, the Bank of Israel announced. Approximately $800 million of the increase were investments in shares in Israeli firms traded in Israel and abroad, while approximately $400 million were foreign currency deposits in Israeli banks. Investment in Israeli shares by foreign citizens rose by 17.7%, to $5.5 billion.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

* ISRAEL'S FOREIGN CURRENCY RESERVES INCREASE TO $11.68 BILLION IN OCTOBER.
Israel's foreign currency reserves rose by $1.41 billion, to $11.68 billion at the end of October, the Bank of Israel reported. The primary reason for the increase was the deposit of $1.2 billion of financial aid by the U.S. government into the Israeli government's account at the Central Bank.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

PRIVATE SECTOR:

* ISRAELI FIRMS SUPPLY MULTIMEDIA COMMUNICATIONS FOR AMERICAN ELECTION COVERAGE.
CBS, the American television network, is using equipment and software from the Herzliya-based firm RTSET to build its "virtual reality" studio for broadcasting the results of the 1996 presidential and congressional elections. CBS is reportedly paying close to $1.5 million for RTSET's products for two days. RTSET is a member of the BVR group, which focuses on simulation equipment for the military. RTSET is also reported to be selling its products for the upcoming Korean elections. (Globes, 05.11.96, p.14)

* EXPORTS OF $13 MILLION WORTH OF PAPRIKA STRAINS DEVELOPED IN ISRAEL.
In 1995, growers in Israel exported $13 million worth of paprika whose special strains were developed in Israel. The new strains of paprika grow to a height of 20 centimeters, thus allowing them to be harvested by combine, rather than by hand as has been done up to now. Approximately 10,000 dunams are dedicated to growing the new paprika strains. (Globes, 30.10.96, "Business Supplement," p.3)

DEFENSE INDUSTRIES SECTOR:

* DEFENSE EXPORTS TO REACH $1.5 BILLION IN 1996.
Exports in the defense sector will rise to $1.5 billion in 1996, according to outgoing Defense Ministry Director-General David Ivri. Ivri said that when he took over at the ministry in the mid-1980s defense exports were $700 million.
Defense Ministry - Dan Weinreich, 972-3-6975546

* EL-OP TO SUPPLY U.S. ARMY WITH $130 MILLION WORTH OF HELICOPTER LASER SYSTEMS.
El-Op, located in Rehovot, has reported that it will be supplying approximately $130 million worth of laser weapons guidance systems for U.S. Army helicopters. The company will supply 1,300 systems each one being worth approximately $100,000 to the Americans, beginning in 1998, for the new generation of American helicopters. The system can also be used with the Apache and Cobra helicopters, as well as others. (Globes, 04.11.96, p.24)

* ELBIT AWARDED $100 MILLION CONTRACT TO REFURBISH ROMANIAN HELICOPTERS.
Elbit, located in Haifa, has been awarded a contract worth $100 million by the Romanian Air Force to refurbish the its French-made Puma helicopters. Elbit which is also modernizing the Romanian Air Force's MIG-21s has had its MIG-21 program expanded by the Romanians. The expansion is worth approximately $35 million for the company and extends the modernization program through 2001. (Ha'aretz, 01.11.96, p.C5)

PEACE ECONOMICS:

* ABU-DHABI NATIONAL OIL FIRM APPOINTS OFFICIAL REPRESENTATIVE IN ISRAEL.
The largest government oil company in Abu-Dhabi has appointed Klima Trade to be its official representative in Israel. Klima also represents other firms which have activities in the Gulf emirate of Dubai. According to Klima, the firm from Abu-Dhabi is interested in setting up an exhibition of Israeli products in Abu-Dhabi. (Globes, 28.10.96, p.10)

TOURISM: