ECONOMIC SURVEY - 16-Feb-98

16 February 1998

(Communicated by GPO Economics Desk)

MACRO-ECONOMIC SECTOR:

* INFLATION RATE INCREASES 0.3% IN JANUARY
Israel's Consumer Price Index rose by 0.3% in January 1998, the Central Bureau of Statistics announced. Fruit and vegetable prices fell by 1.1% while food prices (excluding fruits and vegetables) rose by 0.3%. Other indices which rose include apartments by 1.2%, apartment maintenance by 1.0%, furniture by 0.1%, transportation and communications by 0.6%, education, culture and entertainment by 0.1% and health by 0.6%. The clothing and footwear index fell by 5.6%, in a seasonal adjustment, the bureau reported.
(www.cbs.gov.il)
Central Bureau of Statistics - David Neumann, 972-2-6553400

* INDUSTRIAL EXPORTS FALL BY 0.5% DURING JANUARY
Israeli industrial exports fell by 0.5% to $1.49 billion during January 1998, compared to the same period the year before, the Industry and Trade Ministry reported. The drop was primarily due to a drop in the exports of polished diamonds to $375 million compared to $438 million in January 1997. This is a direct result of the South East Asian currency crisis which caused a 45% drop in polished diamond exports to that region. Without diamond exports, industrial exports rose by 5.3%, to reach $1.11 billion. According to the ministry, although exports to South East Asia were down by 21% compared to January 1997, the currency crisis will have a small overall effect on Israel's exports because exports to the region amount to only 8% of total exports.
(www.tamas.gov.il)
Industry and Trade Ministry - Haya Peri, 972-2-6220340

* UNEMPLOYMENT FALLS DURING LAST QUARTER OF 1997
Israel's unemployment fell to 7.6% during the last quarter of 1997, down from 8% in the year's third quarter and 7.7% in the second quarter, according to statistics recorded by the Central Bureau of Statistics. The percentage of the civilian work force above the age of 15 as a percentage of the total population was 53.4% during the final quarter of 1997, compared to 53.6% during the third quarter. During 1997, the sectors showing the greatest increase in employment were the banking, insurance and finance sectors with an increase of 8.9%, the business services sector at 5.6% and the public administration sector at 5%. However, sectors having drops in employment were the construction sector with a drop of 2.5% and the industrial sector at 1.7%.
(www.cbs.gov.il)
Central Bureau of Statistics - David Neumann, 972-2-6553400

* TRADE DEFICIT CONTINUES TO INCREASE IN JANUARY
Israel's trade deficit has risen at an annual rate of 18% since August 1997, imports have grown by 5% since August 1997 and exports have remained stable, according to the Central Bureau of Statistics. In January, the trade deficit was $410 million. Since August, imports of raw materials rose at an annual rate of between 11-12%, whereas imports of investment inputs have fallen at an annual rate of 13%.
(www.cbs.gov.il)
Central Bureau of Statistics - David Neumann, 972-2-6553400

* FOREIGN INVESTORS HOLD 13.2% OF SHARES ON TEL AVIV STOCK EXCHANGE IN DECEMBER 1997
Foreign investments in traded securities on the Tel Aviv Stock Exchange fell slightly to 13.2% in December 1997 from a level of 13.3% in November, the Bank of Israel reported. At the same time, the number of foreigners holding more than 5% of shares in a company thereby rendering them large shareholders rose to 8% in December, up from 7.5% in November. Foreign investment remained stable in both traded private bonds at 0.3% and in the overall bond market at 0.6%, when compared to the previous month.
(www.bankisrael.gov.il)
Bank of Israel - Gabi Fishman, 972-2-6552712

*MONEY SUPPLY UP BY 0.8% IN JANUARY
Israel's money supply (M1) rose by 0.8% to reach NIS 19.53 billion in January 1998, according to the Bank of Israel. In December 1997 the supply rose by 4.1% whereas in November the figure fell by 4.6%. For all of 1997, the M1 supply was up by 14.1%, the central bank reported.
(www.bankisrael.gov.il)
Bank of Israel - Gabi Fishman, 972-2-6552712

GOVERNMENT SECTOR:

* NEW FINANCE MINISTRY DIRECTOR GENERAL APPOINTED
The Cabinet, on 15.2.98, approved the appointment of Dr. Ben-Zion Zilberfarb as the Finance Ministry's next Director General. Dr. Zilberfarb is a professor in the Economics Department at Bar-Ilan University who has a held a variety of positions within the university as well as working as a consultant with various government ministries and bodies.
(www.mof.gov.il)
Finance Ministry - Eli Yosef, 972-2-5317201

FOREIGN TRADE SECTOR: