ECONOMIC SURVEY
November 19, 1998
(Communicated by GPO Economics Desk)
GOVERNMENT SECTOR:
* GDP GROWTH IN THIRD QUARTER
The Central Bureau of Statistics published its economic statistics for the
third quarter of 1998. Israel's Gross Domestic Product, in real prices and
after adjustment for seasonal influences, rose at an annual rate of 1-2%,
compared to an annual growth rate of 2% for the second half of 1997, and
first quarter of 1998. The Bureau also reported that the import of goods
and services (except defense imports, ships and aircraft) declined during
the third quarter, after a sharp rise in the second quarter. Use of
resources points to a sharp decline in investments in fixed assets after a
period of fluctuations during the previous four quarters, and was 5% lower
than average rate of investments in fixed assets in 1997.
Following are some statistics, calculated at annual rates: Private
consumption expenditures rose in the third quarter at an annual rate of
3%, compared to a 6% rise during the second quarter; purchase of
durable goods rose by 12% per capita, compared to 11% and 8% in the second
and first quarters respectively; non-durable goods and services
expenditures declined by 1% in the third quarter, compared to rises of 5%
and 1% in the second and first quarters respectively; investment in
machinery, equipment and transportation (except for ships and aircraft)
and in non- housing construction dropped by 22%; new housing investment
continued to decline during the third quarter, dropping at an annual rate
of 14%, reflecting a sharp decline of 49% in public housing expenditure
(following a 22% decline in the second quarter) and 3% in private housing
expenditures (after declining 11% in the second quarter).
Exports of goods and services, in real prices, declined in the third
quarter at an annual rate of 19%, after rising 25% in the second quarter
(which had been influenced by exceptional software exports). Third quarter
exports are similar to rates during the first quarter. Industrial exports
(except for diamonds) declined in the third quarter at an annual rate
of
16%, after rising 9% and 16% in the second and first quarters
respectively. Exports of services, including software also declined.
Agricultural exports, however, rose by 17%, continuing the 29% rise during
the second quarter. Income from tourism remained stable.
* ISRAEL FOREIGN TRADE, JAN.-OCT. 1998
Foreign trade with East and South East Asia (including diamonds) showed a
deficit of $250 million, compared to a surplus of nearly $1 billion during
1997. Exports to the United States were 70% higher than imports, while the
trade deficit with the European Union declined by 22%, according to the
Central Bureau of Statistics. These figures mainly reflect changes in the
diamond trade: diamond imports from Britain, Belgium and Switzerland
declined by 18% ($750 million), while diamond exports to East and South
East Asia declined by 40%. In contrast, diamond exports to the United
States increased by 20%. Total imports for the period was $22,700 million
(including diamonds) a decline of 5.4% over 1997, and total exports were
$19,047 million, an increase of 2.9% over 1997.
Trade with the European Union accounted for 35% of exports, 47% of imports
and 71% of Israel's trade deficit. Total trade with the EU rose by $512
million, while imports declined by $407 million, thus shrinking the trade
deficit with the EU. Total imports for the period were $11,026 million,
with another $2,190 from the rest of Europe, and total exports were $5,880
million, with another $1,296 to other European countries.
Trade with the United States accounted for 27% of exports, 22% of imports
and 12% of Israel trade deficit (excluding diamonds). Exports increased by
$350 million, while imports declined by $118. Total imports from the US
for the period were $4,372 million and total exports were $6,735
million.
Trade with East and South East Asia accounted for 13% of exports
(excluding diamonds), 12% of imports and 8% of Israel's trade deficit.
Exports to the region declined by $220 million, while imports increased by
$175 million, increasing the trade deficit by $400 million. Total imports
for the period amounted to $2,267 million, and total exports were $2,139
million.
Israel's overall trade deficit for the period was $3,653 million
(including diamonds), compared to $5,477 million in 1997.