The following article summarizes key events and developments over the last year in the Ministry of Finance and the Israeli economy.
The Israeli economy continued to withstand the global economic crisis in 2011, which turned out to be an important year for the Israeli economy also due to key socio-economic issues receiving more attention.
The following article summarizes key events and developments over the last year in the Ministry of Finance and the Israeli economy, with links to further information in articles posted over the last year by the International Affairs Department in the ministry.
The Israeli economy maintains growth
The Israeli economy continued to withstand the global economic crisis in 2011, while maintaining growth: 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.
For more extensive information, see:
Israel’s rank in leading economic indicators
- Israel’s rank in the World Economic Forum Global Competitiveness Report rose from 24th to 22nd.
- Israel’s rank in the IMD Global Competitiveness Yearbook was kept at 17th.
The Sheshinski Committee submitted its final conclusionsFinal conclusions by the Committee to Examine the Policy on Oil and Gas Resources in Israel, headed by Prof. Eytan Sheshinski were released on January 3, 2011. The Committee recommended several fiscal changes due to major developments and findings of natural gas in Israel.
The outcome of these fiscal changes will ensure that the cash flow of the projects during the debt repayment period will not be impaired, which will safeguard the ability to finance the ventures. That, by reducing the maximum tax rate of the state’s share in the profits, which keeps it on par with the accepted rate of taxes in most countries in which these operations are conducted.