ECONOMIC SURVEY - 12-Mar-96

12 March 1996

(Communicated by GPO Economics Desk)

MACRO-ECONOMIC SECTOR:

* FEBRUARY TRADE GAP WIDENS TO $1.01 BILLION.
Israel's balance of trade deficit continued to increase in February 1996, reaching $1.01 billion, the Central Bureau of Statistics reported. From June through September 1995, the trade deficit grew by 3-5% monthly, but since then, the trade deficit has grown by 2-3% monthly. Imports were $2.48 billion (excluding ships, planes, diamonds, and fuel), while exports were $1.47 billion (excluding diamonds).
Central Bureau of Statistics - David Neumann, 972-2-6553400

* INFLATION TARGET MET WITHOUT DETRACTING FROM ECONOMIC GROWTH OR INCREASING UNEMPLOYMENT.
The Government's inflation target was met in 1995 (8.1%) without detracting from continued strong economic growth and while decreasing unemployment, the Bank of Israel reported in its 1995 Survey on Developments in the Capital and Financial Markets. The central bank reported that its monetary policies, focused on interest rates rather than on foreign currency movements, were instrumental in bringing inflation down from 14.5% in 1994 to the 1995 mark. In its report, it noted that the Government forecast its 1995 local deficit at NIS 7.25 billion, to be financed by NIS 4.6 billion from privatization and NIS 2.7 billion through bonds. However, the actual debt was NIS 8.1 billion, with privatization only bringing in NIS 1.1 billion and NIS 6.5 billion financed by bonds.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

* UNEMPLOYMENT RATE FALLS TO 6% IN LAST QUARTER OF 1995.
Unemployment when taking into account seasonal factors was 6.0% during the last quarter of 1995, the Central Bureau of Statistics reported. The number of unemployed actively seeking labor was 133,000 during this period. During the final quarter of 1995, the civilian work force grew by 2.3%, compared to the same period in 1994, while the civilian work force grew by 3.5% for the entire year.
Central Bureau of Statistics - David Neumann, 972-2-6553400

GOVERNMENT SECTOR:

* GOVERNMENT APPROVES BRINGING OF 16,500 MORE FOREIGN WORKERS.
On 10.3.96, the Government approved the importation of 16,500 more foreign workers into Israel. The workers are scheduled to work in the construction sector (13,000) and in the agriculture branch (3,000). Following these additional approvals, there will be close to 90,000 foreign workers in Israel with some 70% of them working in the construction industry.

(Globes, 11.03.96, p.2)
Cabinet Secretary - Shmuel Hollander, 972-2-705555

PRIVATIZATION:

* TAHAL SOLD TO GROUP LED BY LEUMI & PARTNERS INVESTMENT BANKING.
Tahal, Water Planning for Israel, has been sold for NIS 40.39 million to a group of investors led by Leumi & Partners Investment Banking. Other members of the consortium include Housing and Construction Holdings, Tzmicha Israel Investment Fund, Parsons Brinckerhoff International, and Kardan Investments. The winning consortium was one of five competing for acquiring Tahal, a leading water engineering and consulting concern.
Finance Ministry - Eli Yosef, 972-2-317201

FOREIGN TRADE:

* CHEMICAL INDUSTRY EXPORTS INCREASE BY 11% IN 1995.
Chemical exports rose by 11%, to $2.48 billion, in 1995 (if fuels are excluded, chemical exports rose by 21.2%), the Manufacturers Association reported. Exports of potash and salt rose by 16.5% to $238 million, that of petrochemicals by 55% to $296 million, while fuel, gas, and oil exports fell by 31.2% to $299 million. Exports of organic material and semi- manufactured materials rose by 16% to $326 million, pharmaceutical and fine chemicals by 8% to $237 million, and fertilizers by 31.9% to $423 million.
Manufacturers Association - Oded Ben-Ami, 972-3-5198800

TOURISM:

* 200 ISRAELI EXHIBITORS PARTICIPATE IN I.T.B. TOURISM FAIR IN BERLIN.
200 exhibitors from Israel, including the Tourism Ministry, airlines, hotels, car rental firms, and travel agencies, are participating in the I.T.B. International Tourism Fair taking place in Berlin from 09-13.03.96. Approximately 115,000 people are expected to visit the fair which has more than 4,000 exhibitors from 68 countries.
Tourism Ministry - Michal Marmary, 972-2-754845

ENERGY SECTOR: