ECONOMIC SURVEY - 14-Oct-96

(Communicated by GPO Economics Desk) October 14, 1996

MACRO-ECONOMIC SECTOR:

* BALANCE OF TRADE DEFICIT INCREASES TO $8.1 BILLION.
Israel's balance of trade deficit increased to $8.1 billion at the end of September, as compared to $7.3 billion during the corresponding period in 1995, the Central Bureau of Statistics reported. During the past few months, imports (excluding diamonds) have been holding steady while exports have been climbing by a monthly average of 0.3% (an increase of 4% annually). During September, the trade gap was $706 million, compared to $470 million during the same period last year.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* 696,700 DEPARTURES ABROAD BY ISRAELIS DURING JULY-AUGUST.
696,700 departures abroad were recorded during July-August by Israeli citizens, the Central Bureau of Statistics reported. This represents a 19% increase over the same period in 1995, the bureau reported. 78% of the departures were by air, an increase of 15% over the same period in 1995. The amount of time spent abroad by Israelis has decreased during the past few years from an average of 17 days in 1993 to 12 days in 1996.
Central Bureau of Statistics - David Neumann, 972-2-6553400

GOVERNMENT SECTOR:

* CABINET APPROVES BRODET COMMISSION REPORT WITH CHANGES.
Following late night discussions on 13-14.10.96, the Cabinet approved the Brodet Commission Report concerning changing the structure of capital markets, albeit with some changes. By a vote of four in favor (PM Netanyahu, Industry and Trade Minister Sharansky, Health and Justice Minister Hanegbi, and Labor and Social Welfare Minister Yishai), two against (Finance Minister Meridor and Science Minister Begin), and one abstention (Absorption Minister Edelstein), the Cabinet voted to accept the Brodet Commission's recommendations, minus taxation of short- and medium-term savings. The issues surrounding short- and medium-term savings will be dealt with within two weeks by the director-generals of the Prime Minister's Office, the Finance Ministry and the Bank of Israel.
Finance Ministry - Elisheva Braun, 972-2-317201

* ISRAEL AND EUROPEAN UNION TO ESTABLISH JOINT COMMITTEE TO EXAMINE TRADE GAP.
Finance Minister Dan Meridor met with the European Union's Ambassador to Israel, Jean-Paul Jesse, on 10.10.96, in order to discuss various economic matters between the EU and Israel. During the meeting, Finance Minister Meridor said that he supports the establishment of a joint committee to examine the reasons behind Israel's trade deficit with the EU $6.5 billion at the end of 1995 and to identify obstacles to its reduction. The joint committee is expected to begin functioning in mid-1997.
Finance Ministry - Eli Yosef, 972-2-317201

PRIVATIZATION:

* AMERICAN INVESTMENT BANK LAZARD FRERES TO JOIN CONSORTIUM TO BUY BANK HAPOALIM.
The British arm of the American investment bank Lazard Freres is joining the consortium led by Israeli businessman Eliezer Fishman in his bid to purchase controlling interest in Bank Hapoalim. This past weekend, a number of the company's executives arrived in Israel for talks with M.I. Holdings, the government agency responsible for selling the bank's shares, and to hold discussions with Fishman.
(Ma'ariv, 14.10.96, p.C3)

TOURISM:

* ISRAELI AND JORDANIAN TOURISM MINISTERS HOLD JOINT PRESS CONFERENCE.
Tourism Minister Moshe Katzav and his Jordanian counterpart, Salah Irshaidath, held a joint press conference on 07.10.96, at the international convention of the American Society of Travel Agents, ASTA. Both ministers said that the peace process was irreversible and that it political differences must not prevent tourists from around the world from enjoying the attractions in Israel and Jordan.
Tourism Ministry - Michal Marmary, 972-2-754845

DEFENSE INDUSTRIES SECTOR:

* FIVE ISRAELI FIRMS TO PARTICIPATE IN KOREAN DEFENSE AERONAUTICS EXPO.
Five Israeli firms will be participating in a defense aeronautics exhibition to be held from 21-27.10.96, in Seoul, Korea. The firms Elbit, Israel Aircraft Industries, El-Op, Rafael, and TAAS Israel Industries (formerly Israel Military Industries) will exhibit various defense electronics, weapons, space and computer systems.
Defense Ministry - Dan Weinreich, 972-3-6975546