ECONOMIC SURVEY
14 May 1996
(Communicated by GPO Economics Desk)
GOVERNMENT SECTOR:
* GOVERNMENT APPROVES RECONSTRUCTION AND CONSOLIDATION PLAN FOR NORTHERN
CONFRONTATION LINE AFFECTED BY OPERATION GRAPES OF WRATH.
On 12.05.96, the Cabinet approved a reconstruction and consolidation plan
for the northern communities which were affected by Operation Grapes of
Wrath, at a cost of NIS 950 million. The plan will include developing new
economic resources for the region, providing direct support to its
residents, and providing support for local authorities. A majority of the
plan's cost will go towards tax and mortgage breaks, as well as assorted
advantages granted to the business sector. The plan will be implemented
over a period of three years.
Finance Ministry - Eli Yosef, 972-2-317201
* INFLATION INDEX WILL BE ANNOUNCED SIMULTANEOUSLY ON INTERNET.
Tomorrow (Wednesday), 15.05.96, at 16:30 hours the time at which
April's Consumer Price Index (CPI) is announced for the first time, the
Central Bureau of Statistics will upload April's inflation rate. The CPI
will be found on the bureau's internet site: http://www.cbs.gov.ilCentral Bureau of Statistics - David Neumann, 972-2-6553400
MACRO-ECONOMIC SECTOR:
* INDUSTRIALISTS REPORT SLOWER GROWTH RATE DURING FIRST PART OF YEAR.
Economic growth during the first part of the year has been slower,
according to a survey of 190 industrial concerns by the Israel
Manufacturers Association. Exports have grown only slightly during the
period while local sales have frozen, according to the report. Only 34% of
the firms surveyed said that they had increased local sales, compared to
41% in January 1996 and 53% in October 1995, while the number of firms
recording drops in local sales grew to 35%, up from 29% in January 1996
and 16% in October 1995. Exporters reporting export growth fell to 35%,
compared to 44% in January 1996, whereas those reporting greater profits
dropped to 22%, compared to 25% in the earlier survey. Industrial
productivity continued a downward trend, according to this survey, with
44% of the respondents noting a growth in productivity, the same as in
January 1996 but down from 58% in October 1995; while 33% reported
productivity decrease, compared to 26%, in January 1996, and 17% in
October 1995.
Manufacturers Association - Oded Ben-Ami, 972-3-5198800
* INDUSTRIAL SECTOR ECONOMIC GROWTH ONLY 2-3% IN 1996.
Israel's industrial sector economic growth will increase by only 2-3% in
1996, compared to almost 8% in 1995, according to the Israel Manufacturers
Association. According to Yoram Belizofsky, the Association's Director-
General, since the second half of 1995, the sector's economic growth has
been at a rate of only 2.5%.
Manufacturers Association - Oded Ben-Ami, 972-3-5198800
FOREIGN TRADE:
* ISRAEL-EGYPT CHAMBER OF COMMERCE TO OFFICIALLY OPEN ON 16.05.96.
The Israel-Egypt Chamber of Commerce will be officially opened on 16 May
1996 in Tel Aviv with the participation of Industry and Trade Minister
Micha Harish and Egypt's Ambassador to Israel, Muhammad Bassiouny. In
1995, exports to Egypt were approximately $30 million, while imports
excluding petroleum were $47 million.
Industry and Trade Ministry - Dor Marom, 972-2-220389
* 40 MILLION FLOWERS EXPORTED FOR MOTHERS' DAY.
During the ten days prior to Mothers' Day in Europe and the United States,
approximately 40 million flowers valued at NIS 22 million were
exported, according to the Production and Marketing Board of Ornamental
Plants. To supply the demand, the board rented 30 flights.
Ornamental Plants Board - Ya'akov Siton, 972-3-6957985
Agriculture Ministry Ronny Hassid, 972-3-6484894
DEFENSE INDUSTRIES SECTOR:
* AMOS 1 COMMUNICATION SATELLITE TO BE LAUNCHED ON 16.05.96.
Israel's first communication satellite, the AMOS 1, is scheduled to be
launched on Thursday, 16.5.96, from French Guiana in South America,
according to the project's initiator Israel Aircraft Industries. The AMOS
1 will provide regional communication satellite services for the Middle
East and Central European regions. It will be sharing an Arianespace
launch with an Indonesian satellite.
Israel Aircraft Industries - Sylvia Beit-Halachmy, 972-3-9358541/2
PRIVATIZATION:
* GOVERNMENT INTENDS TO SELL HOLDINGS IN YOZMA VENTURE CAPITAL FUND.
Yozma, the Government's venture capital fund instrument, will be sold to
outside investors, Tami Ben-David, head of the Government Companies
Authority announced. Yozma, established in 1992, has served as one of the
government's conduits for promoting venture capital investments in local
industry. Up to now, the fund has invested $68 million in money up
front and in obligations in the funds and has made $10 million in
direct investments. Yozma has become a partner in 9 venture capital fund
partnerships, which have a capitalization of $200 million, that include
local and foreign partners. The government has decided to sell Yozma
because its purpose to create a venture capital market which was not
being fulfilled by the private sector, a situation which existed in the
early 1990s has now been fulfilled by both international and local
players in the private sector.
Finance Ministry - Eli Yosef, 972-2-317201