Thursday, January 12, 2012

The Israeli Economy 2011

The Israeli economy continued to withstand the global economic crisis in 2011, while maintaining growth:(source Israeli Finance Ministry) Israel's GDP per-capita is forecasted to grow by 3% in 2011. Also, Israel managed to decrease its unemployment to an historic low level, standing at only 5.5% in the 2nd quarter of 2011, and 5.6% in the 3rd quarter of 2011.

Inflation in the last 12 months (Nov. 2011 compared to Nov. 2010) stands at 2.6%, within the target bandwidth of the Bank of Israel (1%-3%). Average monthly Consumer Price Index (where 2010=100) grew from 101.4 in Nov. 2010 to 104.1 in Oct. 2011. The Bank of Israel Interest rate grew gradually from 2% in Jan. 2011 to 3.25% in June. In between June to September, Bank of Israel interest rate was stagnant, and then was gradually decreased to 2.75% in Dec. 2011.

Both imports and exports knew a recovery in the 1st half of 2011, with a decline in the 3rd quarter. Exports of goods and services are forecasted to grow by 3.8% in 2011, and imports of goods and services are forecasted to grow by 9.2% in 2011.

China was Israel’s third-largest export destination in the first three quarters of 2011, and is expected to bypass the UK and become Israel's second export destination by the end of 2011. That, even without adding Israel's trade figures with Hong Kong to the total trade figures with China.

Argentina became the last of the South American Mercosur trade block of four to sign a free trade agreement with Israel. Trade in 2010 between Israel and other Mercosur countries (Brazil, Uruguay and Paraguay) reached $1.8 billion. Trade with Argentina, on the other hand, only reached $130 million due to high tariffs on Israeli goods there.

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