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The Economy of Israel

Israeli Economy

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Economy - overview: Israel has a technologically advanced market economy with substantial, though diminishing, government participation. It depends on imports of crude oil, grains, raw materials, and military equipment. Despite limited natural resources, Israel has intensively developed its agricultural and industrial sectors over the past 20 years. Israel imports substantial quantities of grain but is largely self-sufficient in other agricultural products. Cut diamonds, high-technology equipment, and agricultural products (fruits and vegetables) are the leading exports. Israel usually posts sizable trade deficits, which are covered by large transfer payments from abroad and by foreign loans. Roughly half of the government's external debt is owed to the US, its major source of economic and military aid. Israel's GDP, after contracting slightly in 2001 and 2002 due to the Palestinian conflict and troubles in the high-technology sector, has grown by about 5% per year since 2003. The economy grew an estimated 4.2% in 2008, slowed by the global financial crisis. The government's prudent fiscal policy and structural reforms over the past few years have helped to induce strong foreign investment, tax revenues, and private consumption, setting the economy on a solid growth path.

GDP:

GDP - real growth rate: 3.9% (2008 est.) 5.4% (2007 est.) 5.1% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 2.7% industry: 31.7% services: 65.6% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 2.6% highest 10%: 24.2% (2007)

Distribution of family income - Gini index: 38.6 (2005)

Inflation rate (consumer prices):

Labor force: 2.95 million (2008 est.)

Labor force - by occupation: agriculture: 2% industry: 16% services: 82% (30 September 2008)

Unemployment rate: 6.1% (2008 est.)

Budget: revenues: $68.44 billion expenditures: $70.06 billion (2008 est.)

Industries: high-technology projects (including aviation, communications, computer-aided design and manufactures, medical electronics, fiber optics), wood and paper products, potash and phosphates, food, beverages, and tobacco, caustic soda, cement, construction, metals products, chemical products, plastics, diamond cutting, textiles, footwear

Industrial production growth rate: 4.1% (2008 est.)

Electricity - production: 48.7 billion kWh (2006 est.)

Electricity - production by source:

Electricity - consumption: 44.74 billion kWh (2006 est.)

Electricity - exports: 1.844 billion kWh (2006 est.)

Electricity - imports: 0 kWh (2007 est.)

Oil - production: 5,966 bbl/day (2007 est.)

Oil - consumption: 232,300 bbl/day (2006 est.)

Oil - exports: 82,910 bbl/day (2005)

Oil - imports: 334,300 bbl/day (2005)

Oil - proved reserves: 1.94 million bbl (1 January 2008 est.)

Natural gas - production: 2.35 billion cu m (2006 est.)

Natural gas - consumption: 2.27 billion cu m (2006 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 0 cu m (2007 est.)

Natural gas - proved reserves: 30.44 billion cu m (1 January 2008 est.)

Agriculture - products: citrus, vegetables, cotton; beef, poultry, dairy products

Exports: $54.16 billion f.o.b. (2008 est.)

Exports - commodities: machinery and equipment, software, cut diamonds, agricultural products, chemicals, textiles and apparel

Exports - partners: US 35%, Belgium 7.5%, Hong Kong 5.8% (2007)

Imports: $62.52 billion f.o.b. (2008 est.)

Imports - commodities: raw materials, military equipment, investment goods, rough diamonds, fuels, grain, consumer goods

Imports - partners: US 13.9%, Belgium 7.9%, Germany 6.2%, China 6.1%, Switzerland 5.1%, UK 4.7%, Italy 4.1% (2007)

Debt - external: $91.25 billion (31 December 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: new Israeli shekels (ILS) per US dollar - 3.56 (2008 est.), 4.14 (2007), 4.4565 (2006), 4.4877 (2005), 4.482 (2004)

Fiscal year: