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May 2009 The Israeli economy
Starting Point
5 Years of Rapid Economic Growth
A Continuous Decline in Unemployment Rate
Export Intensity Growth
A Rapid Growth in Israeli Industry
The High Tech Sector Contribution to Industrial Growth in 2004-2008
A Continues Surplus in The Current Account Balance  Source: Bank of Israel
Corporate Tax Reduction
Towards 2009
Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources  </li></ul><ul><li>An ...
World Leadership in Civilian R&D  Investments Source: OECD, Israeli CBS
Quality of Scientific Research Institutions Source: The Global Competitiveness Report 2008-2009, World Economic Forum
Availability of Scientists and Engineers Source:   The Global Competitiveness Report 2008-2009, World Economic Forum
Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources   </li></ul><ul><li>An...
Highly Educated Population Source: OECD, Israeli CBS ,2004
Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources  </li></ul><ul><li>An ...
The Share of ICT Sector  Out of The Business Sector GDP Information & Communications Technologies, 2006 Source: Israeli CBS
Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources  </li></ul><ul><li>An ...
A Rise in Capital Adequacy Ratio in Most Israeli  Banks Israeli 5 largest bank groups have relatively high Capital Adequac...
Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources  </li></ul><ul><li>An ...
Household saving rates Per cent of disposable household income Source: Leumi Bank
Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs  </li></ul><ul><li>Relatively Hig...
2006-2008: A Sharp Revaluation of the Shekel Since Oct. 2008 the Shekel depreciated by 20% against the Dollar
Revaluation Implications Survey  Erosion of Competition Ability At the Time of the Survey: NIS/Dollar= 3.371  Source: Reva...
Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs  </li></ul><ul><li>Relatively Hig...
High Labor Costs
Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs   </li></ul><ul><li>Relatively Hi...
2008 - Relatively High Corporate Tax Source: KPMG,  2008
Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs   </li></ul><ul><li>Relatively Hi...
In the next 2 years- 52% will be off shoring Source: Off shoring Survey, Manufacturers’ Association of Israel. May 2008.
Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs   </li></ul><ul><li>Relatively Hi...
60% of Israeli Export of Goods is Shifted to the US & the EU
2009: A Sharp Decline in Developed Economies
2009 Forecasts
2009:A Decline in Israeli Economy
An Increase in Unemployment Rate
Thank you Manufacturers’ Association of Israel
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The Israeli Economy May 2009

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The Israeli Economy May 2009

  1. 1. May 2009 The Israeli economy
  2. 2. Starting Point
  3. 3. 5 Years of Rapid Economic Growth
  4. 4. A Continuous Decline in Unemployment Rate
  5. 5. Export Intensity Growth
  6. 6. A Rapid Growth in Israeli Industry
  7. 7. The High Tech Sector Contribution to Industrial Growth in 2004-2008
  8. 8. A Continues Surplus in The Current Account Balance Source: Bank of Israel
  9. 9. Corporate Tax Reduction
  10. 10. Towards 2009
  11. 11. Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources </li></ul><ul><li>An advanced economy </li></ul><ul><li>A Rise in capital adequacy ratio </li></ul><ul><li>High saving rate </li></ul>
  12. 12. World Leadership in Civilian R&D Investments Source: OECD, Israeli CBS
  13. 13. Quality of Scientific Research Institutions Source: The Global Competitiveness Report 2008-2009, World Economic Forum
  14. 14. Availability of Scientists and Engineers Source: The Global Competitiveness Report 2008-2009, World Economic Forum
  15. 15. Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources </li></ul><ul><li>An advanced economy </li></ul><ul><li>A Rise in capital adequacy ratio </li></ul><ul><li>High saving rate </li></ul>
  16. 16. Highly Educated Population Source: OECD, Israeli CBS ,2004
  17. 17. Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources </li></ul><ul><li>An advanced economy </li></ul><ul><li>A Rise in capital adequacy ratio </li></ul><ul><li>High saving rate </li></ul>
  18. 18. The Share of ICT Sector Out of The Business Sector GDP Information & Communications Technologies, 2006 Source: Israeli CBS
  19. 19. Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources </li></ul><ul><li>An advanced economy </li></ul><ul><li>A Rise in capital adequacy ratio </li></ul><ul><li>High saving rate </li></ul>
  20. 20. A Rise in Capital Adequacy Ratio in Most Israeli Banks Israeli 5 largest bank groups have relatively high Capital Adequacy Ratio, compared to the requirement set by Basel Committee on Banking Supervision (8%)
  21. 21. Strengths <ul><li>World leader in R&D investments </li></ul><ul><li>Highly educated human resources </li></ul><ul><li>An advanced economy </li></ul><ul><li>A Rise in capital adequacy ratio </li></ul><ul><li>High saving rate </li></ul>
  22. 22. Household saving rates Per cent of disposable household income Source: Leumi Bank
  23. 23. Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs </li></ul><ul><li>Relatively High Corporate Tax </li></ul><ul><li>Off Shoring </li></ul><ul><li>High exposure to the developed economies </li></ul>
  24. 24. 2006-2008: A Sharp Revaluation of the Shekel Since Oct. 2008 the Shekel depreciated by 20% against the Dollar
  25. 25. Revaluation Implications Survey Erosion of Competition Ability At the Time of the Survey: NIS/Dollar= 3.371 Source: Revaluation Survey, Manufacturers’ Association of Israel. July 2008.
  26. 26. Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs </li></ul><ul><li>Relatively High Corporate Tax </li></ul><ul><li>Off Shoring </li></ul><ul><li>High exposure to the developed economies </li></ul>
  27. 27. High Labor Costs
  28. 28. Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs </li></ul><ul><li>Relatively High Corporate Tax </li></ul><ul><li>Off Shoring </li></ul><ul><li>High exposure to the developed economies </li></ul>
  29. 29. 2008 - Relatively High Corporate Tax Source: KPMG, 2008
  30. 30. Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs </li></ul><ul><li>Relatively High Corporate Tax </li></ul><ul><li>Off Shoring </li></ul><ul><li>High exposure to the developed economies </li></ul>
  31. 31. In the next 2 years- 52% will be off shoring Source: Off shoring Survey, Manufacturers’ Association of Israel. May 2008.
  32. 32. Weaknesses <ul><li>Erosion in exporters profitability </li></ul><ul><li>High labor costs </li></ul><ul><li>Relatively High Corporate Tax </li></ul><ul><li>Off Shoring </li></ul><ul><li>High exposure to the developed economies </li></ul>
  33. 33. 60% of Israeli Export of Goods is Shifted to the US & the EU
  34. 34. 2009: A Sharp Decline in Developed Economies
  35. 35. 2009 Forecasts
  36. 36. 2009:A Decline in Israeli Economy
  37. 37. An Increase in Unemployment Rate
  38. 38. Thank you Manufacturers’ Association of Israel

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