ECONOMIC SURVEY
(COMMUNICATED BY GOVERNMENT PRESS OFFICE ECONOMICS DESK)
July 29, 1996
MACRO-ECONOMIC SECTOR:
* INITIAL ECONOMIC INDICATORS SHOW GROWTH IS SLOWING.
Revenues from tourism decreased, retail chain store sales and imports of
investment assets grew more slowly, and imports of production inputs were
stable, during the months of May and June, the Central Bureau of
Statistics reported. During the same period, industrial exports increased
by 2%, following a drop in exports from February through April. Production
input imports grew by an annual rate of 9% during May and June, lower than
growth of 10-11% in April and March, and 14-17% in January and February.
Retail chain store sales during May-June slowed to an annual growth rate
of 4-5%, whereas in March-April the growth rate was at an annual pace of
10-13%. During April-June, imports of durable goods fell after increasing
from July 1995 through March 1996.
Central Bureau of Statistics - David Neumann, 972-2-6553400
GOVERNMENT SECTOR:
* BANK OF ISRAEL REDUCES INTEREST RATE BY 0.7%.
On 29.7.96, the Bank of Israel announced it was reducing the interest
rates on funds provided to the commercial banking system by 0.7%. The
central bank reported it taking this move due to recent economic
statistics showing that expectations of increased inflation have fallen.
The bank also pointed to the results of its monetary policy which has
succeeded in reducing the M1 money supply during the past few months.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712
* GOVERNMENT APPROVES BANK HAPOALIM'S REQUEST TO SELL 5.5% OF ITS SHARES
IN CLAL ISRAEL.
The government has approved Bank Hapoalim's request to sell off 5.5% of
its shares in Clal Israel, one of the country's largest conglomerates, in
order to reach an ownership level of 25%, the Finance Ministry announced.
When the bank, technically owned but not managed by the government, sells
its shares in Clal, it will fulfill its legal obligation concerning
regulations on concentration of resources in the economy, under which the
bank can own up to 25% of a non-financial company. It must reach this
level by the end of 1996.
Finance Ministry - Eli Yosef, 972-2-317201
* INDUSTRY AND TRADE MINISTER SHARANSKY TO MEET WITH WORLD BANK HEAD.
Industry and Trade Minister Natan Sharansky will meet this week with World
Bank head James Wolfensohn. The purpose of his meeting will be to promote
Israel's participation in international tenders and to propose education
projects which Israel is willing to sponsor. During his meetings with U.S.
officials, Sharansky will discuss quickening the pace for the Palestinian
Authority to receive identical free trade area terms to those of Israel;
rules of origin for Israeli-Canadian and Israeli-American products trading
between the U.S. and Canada; removal of Israel from the list of countries
which are not allowed to purchase supercomputers (Israel is on list "C"
with India, Pakistan, China, and other Middle Eastern countries); and
cancellation of customs fees which are imposed by the U.S. on all but
NAFTA countries; among other matters.
Industry and Trade Ministry - Haya Peri, 972-2-220390
* COMMISSION TO EXAMINE STRUCTURAL CHANGE IN CAPITAL MARKETS.
Finance Minister Dan Meridor has appointed Finance Ministry Director-
General David Brodet to head a commission to examine various possibilities
for making structural changes in the capital markets. The commission will
examine the most favorable structure for savings schemes; incentives and
taxation of savings; coordination of legislation; organization and
supervision of various facets of capital markets operations; and
operational parameters for policy tools in the capital, foreign currency,
and financial markets. Among the members of the commission are head of the
Israel Securities Authority Aryeh Mentkovitch, Tel Aviv Stock Exchange
Director-General Sam Bronfeld, Bank of Israel Senior Director Dr. David
Klein, and Finance Ministry capital markets, insurance, and savings
supervisor Doron Shorer.
Finance Ministry - Eli Yosef, 972-2-317201
FOREIGN TRADE:
* DELEGATION FROM JAPAN'S MITI VISITING ISRAEL.
A delegation from the Japanese Ministry of Industry and Trade (MITI), is
visiting Israel this week in order to examine cooperation options with
Israeli firms. Companies active in banking, financial services,
electronics, and trading will be part of the delegation. Among the
companies represented in the group are NEC, Tomen, Fujitsu, Sumitomo,
Mitsubishi (banking and industrial), and Fuji (banking).
Center for Business Promotion - Noah Shani, 972-2-861707
TOURISM:
* TOURIST ARRIVALS DOWN BY 19% IN MARCH-MAY 1996.
Tourist arrivals were down by 19% in March through May, as compared to
January and February of this year, and 9% as compared to November-December
1995, the Central Bureau of Statistics reported. The bureau reported that
from October 1995 through May 1996, 11% of all tourist arrivals were
direct charter flights, primarily from Europe, landing in Eilat.
Central Bureau of Statistics - David Neumann, 972-2-6553400