ECONOMIC SURVEY
July 20, 1998
(COMMUNICATED BY GPO ECONOMICS DESK)
MACRO-ECONOMIC SECTOR:
* PRICE INDEX FOR JUNE 1998
The price index for June 1998 rose by 0.4%, reaching 156.5 points (base:
1993 = 100). The increase reflects rises in the clothing and footwear,
transportation and communication branches, which were partially offset by
drops in the cost of fruits and vegetables. Since the start of the year,
the price index has risen 2.2%.
* TRADE DEFICIT WITH US AND EU DROPS; INCREASES WITH ASIA
Israel's trade deficit (diamonds excepted) amounted to $3.45 billion in
the 1st half of 1998, a $950 million drop (22%) compared to the same
period in 1997. The trade deficit with the United States was 44% lower and
with the European Union, 20%. By comparison, the trade deficit with Asia
rose by $180 million, a 45% increase over the comparable period in 1997.
Import of goods (diamonds excepted) dropped by 2% in the 1st half of 1998,
while exports of goods (diamonds excepted) increased by $700 million (9%)
over the same period. Most of the increase went to the European Union and
the United States, offset by a drop in exports to Asian countries. Total
imports in June 1998 amounted to $2.38 billion, 70% of which was raw
materials and 30% investment and consumer goods. Total exports for the
month amounted to $1.7 billion, 79% of which were industrial goods and
software, 18% diamonds and 3% agricultural goods. Diamond exports to East
Asia decreased by over 40%, and goods by 18% for a total decrease of $570
million, while imports of goods from the region fell by only 0.6% in
comparison to the 1st half of 1997.
(www.cbs.gov.il)
Central Bureau of Statistics - David Neumann, 972-2-6553400
* DELEGATION TO MEXICO FOR FREE TRADE ZONE TALKS
A delegation left on 12.7.98 to Mexico for continued talks on the
establishment a free trade zone between Mexico and Israel. Bilateral
trade, consisting mainly of chemical products, engines and electronic
equipment medical equipment and optics, today amounts to $80 million, 92%
of which is Israeli exports, and rising rapidly.
(www.tamas.gov.il)
Industry and Trade Ministry - Haya Peri, 972-2-6220430
GOVERNMENT SECTOR:
* 62,000 SQ. M. OF LAND AUTHORIZED FOR INDUSTRIAL DEVELOPMENT
The Ministry of Industry and Trade's Unit for Development Areas has
authorized a total of 62,000 square meters of land for factory development
in the Ma'alot Tashiha, Tiberias and Shilo Industrial Zones.
Infrastructure development for the new land will cost NIS 12 million and
the new plants will provide employment for some 90 workers.
* 40 REQUESTS FOR AID TO MOVIE PRODUCERS AUTHORIZED
Since the beginning of the year, 40 requests by movie producers for aid
from the Fund to Promote Marketing Abroad were authorized by the Ministry
of Industry and Trade, at a cost of NIS 3.4 million. The fund will pay for
up to 1/3 of a film's marketing costs abroad up to $150,000 per film per
year. The Ministry only encourages a film's marketing and business
aspects, and has no authority over its artistic contents.
(www.tamas.gov.il)
Industry and Trade Ministry - Haya Peri, 972-2-6220430
* ISRAEL ELECTRIC CORP. BOND ISSUE SUCCEEDS
Israel Electric Corporation has successfully sold a bond issue of $400
million in the United States: $125 were 20 year bonds and the remainder
for 7 years. American investment banks concluded that the issue succeeded
due to the corporation's strong position, winning an A- rating, identical
to the State of Israel itself, and despite the market uncertainties
arising from the Asian crisis and Middle Eastern insecurities.
Israel Electric Company Spokesman's Office, 972-4- 8548383
PRIVATE SECTOR:
* INCREASE IN TOURISM OVER PASSOVER SINCE LAST YEAR
On Passover eve, nearly 62,000 registered at Israel's hotels; 28,500
foreign tourists and 33,500 Israelis, not including guests who
participated in Seder meals. This figure is 15% higher than Passover eve
1997. Average hotel occupancy has risen to 73%, up 2% from last Passover
(www.cbs.gov.il)
Central Bureau of Statistics - David Neumann, 972-2-6553400
* TASE TO HAVE COMPUTERIZED TRADE IN DERIVATIVES
The Directorate of the Tel Aviv Stock Exchange decided in principle to
install continuous computerized trade in derivatives, upgrading the
existing system in the TA-25 index. The installation is expected in about
six months.
(www.tase.co.il)
Tel Aviv Stock Exchange - Irit Harel, 972-3-5677405
* INSURANCE COMPANIES PREPARATION FOR 2000
The Supervisor for Insurance Tzippi Semet instructed the managers of
insurance companies that they must be ready to handle insurance risks
caused by the year 2000 bug, such as risks from exposure to lawsuits
caused by professional and managerial responsibility and job-related
issues.
(www.mof.gov.il\2000)