ECONOMIC SURVEY - 22-Aug-96

22 August 1996

(COMMUNICATED BY GPO ECONOMICS DESK)

GOVERNMENT SECTOR:

* $25 BILLION SPENT ON IMMIGRANT ABSORPTION SINCE 1990.
The government spent more than $25 billion on immigrant absorption between the years 1990 to 1996, Finance Ministry Director-General David Brodet announced. In 1996, he said that the government is planning to allocate close to $3 billion on immigrant absorption related items. Israel has absorbed over 750,000 immigrants, primarily from the former Soviet Union, since 1989.
Finance Ministry - Eli Yosef, 972-2-317201

* INDUSTRY AND TRADE MINISTRY PREPARING PROGRAM FOR PROMOTING TRADE WITH CIS REPUBLICS.
The Industry and Trade Ministry has begun preparing a program to promote trade relations with the CIS Republics by taking advantage of the entrepreneurial proclivity of new immigrants from those countries. According to Industry and Trade Minister Natan Sharansky, "these immigrants from the former Soviet Union have the background and skills that will be an active agent in granting a relative advantage in the CIS markets." During the first half of 1996, exports to Russia, the main market in the former Soviet Union, rose by 19% to $132 million. Israel exported $240 million worth of goods to Russian in 1995, mostly food products and consumer goods, while receiving $124 million in Russian imports.
Industry and Trade Ministry - Haya Peri, 972-2-220340

* U.S. FOOD AND DRUG ADMINISTRATION TO ALLOW CERTAIN PRODUCTS APPROVED BY ISRAEL'S HEALTH MINISTRY.
The FDA, an agency of the American government which grants approvals for food and drug products, will cooperate, on a trial basis, with the Israeli Ministry of Health by granting approvals to certain cosmetics and food products that have already been approved by the Ministry of Health. The decision by the FDA and the Ministry of Health was taken during a meeting of the U.S.-Israel Science and Technology Commission held in Washington D.C. a number of weeks ago.
Industry and Trade Ministry - Haya Peri, 972-2-220340

* IMF DELEGATION TO VISIT ISRAEL IN SEPTEMBER.
A research delegation from the International Monetary Fund is scheduled to visit Israel in early September in order to prepare the Fund's annual report on the state of the Israeli economy. During their visit, the delegation will meet officials from the government and the Bank of Israel as well as with representatives from the private sector.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

MACRO-ECONOMIC SECTOR:

* GDP GROWTH FOR FIRST HALF OF 1996 FALLS TO 3-4%.
Israel's Gross Domestic Product grew by 3-4% during the first half of 1996, compared to growth of approximately 7% in each half of 1995, the Central Bureau of Statistics reported from early indicators. The increase in total resources at the economy's disposal (from local production and imports) rose by an annual rate of 5%, as compared to an annual rate of 9% during each half of 1995.
Most of the increase in total resources available for the economy was used for private consumption or investment in fixed assets. The increase in private consumption rose at an annual rate of 8.4% and 5.7% per capita during the first half of 1996, as compared to increases of 5.5% and 2.7%, respectively, during the second half of 1995.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* INDUSTRIALISTS ANTICIPATE CONTINUED DETERIORATION IN THEIR BUSINESS.
A survey conducted by the Israel Manufacturers Association of some 200 factories reported that industrialists expect local sales to drop along with a period of no growth for exports during the second half of 1996. 40% of the factories reported a drop in local sales, as compared to 35% in the last quarterly survey and 29% in January 1996. The number of exporters reporting a growth in exports fell to 31% from 35%,while the number reporting a decrease in exports rose to 31% from 25% in the last survey. 35% of the exporters also reported a decrease in the price of exports, compared to 25% during the previous survey.
Manufacturers Association - Danny Laish, 972-3-5198787

TOURISM SECTOR:

* TOURIST ARRIVALS DOWN SINCE BEGINNING OF YEAR.
Tourist arrivals from March to June were down by 20%, in comparison to the number of arrivals in January-February; down by 11% in comparison to November-December 1995; down by 7% in comparison to May-June 1995, the Central Bureau of Statistics reported. During the first half of 1996, 1.207 million arrivals [1.099 million tourists] were recorded in Israel compared to 1.168 million [ 1.050 million tourists] for the same period in 1995.
Central Bureau of Statistics - David Neumann, 972-2-6553400

PEACE ECONOMICS: