The Israeli Economy

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The Israeli Economy
Stanley Fischer Bank of Israel June 2008
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Growth Rate of GDP2000-2008

2008 BOI Forecast.
3
Rate of Inflation in Last 12 Months and
Inflation Targets, 1992-2008

4
Bank of Israel Interest Rate, Inflation
Expectations, and the Feds interest Rate,
2004-2008

For 12 months, as derived from the capital
market.
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Budget Deficit (percentage of GDP, 2000-2007)

Percent of GDP excluding credit extended. Until
1996, domestic deficit from 1997, total
deficit. The data from 2000 refer to the
deficit excluding the Bank of Israels profits.
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Public Sector Debt,Percentage of GDP, 2000-2007
(year-end)

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• International Aspects

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The Nominal and the Real Exchange Rate2008 - 1997
NIS
Shekel / Dollar Exchange Rate 01/01/1997-20/06/200
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The Real Exchange Rate by Trading Partners
(10001/1997, 01/1997-06/2008)

• A rise in the index indicates depreciation.
• The figure for June 2008 is calculated from spot
  exchange rates known for the half-month, our
  forecast CPI from the monthly model, and an
  extrapolation of inflation in the countries whose
  currencies are in the currency basket.
• SOURCE IFS data. For February 2008 to June 2008,
  Bank of Israel calculations.

108.9
The Nis/ chart is on a daily basis, while the
real exchange rate chart is on a monthly basis.
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(No Transcript)
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Current Account of Balance of Paymentsas
Percentage of GDP, 1995-2008 (Annual)

• SOURCE Balance of Payments, Central Bureau of
  Statistics.

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Openness of the Israeli Economy(percentage of
GDP, 1995-2008)

BOI Forecast
Goods and Services.
Source National accounts, CBS.
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Manufacturing Exports by Technology Intensity
High-technology Industries office computing
equipment, electronic components, aircraft,
electronic communication equipment, equipment for
control supervision, pharmaceutical
products. Medium-high-technology Industries
chemicals refining petroleum, machinery
equipment, electronic equipments electrical
motors, transport equipment. Medium-low-technology
Industries mining quarrying, rubber plastic
products, non-metallic mineral products, basic
metals, metal products, ships boats, jewelry
silversmiths, articles n.e.c. Low-technology
Industries food products, beverages tobacco,
textiles, wearing apparel leather, paper,
printing wood products.
Source Foreign Trade, CBS.
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Investment in Israel by Nonresidents(as
percentage of GDP, 2000-2007)
8,798
7,251
5,058
270
14,694
4,217
1,812
75
10,276
723
5,062
4,868
3,822
3,626
2,012
1,767
Investment of Israeli Residents Abroad (as
percentage of GDP, 2000-2007)

9,790
8,244
6,649
14,992
2,381
3,154
2,149
2,708
7,064
2,941
4,548
2,065
1,623
3,336
982
688
SOURCE Central Bureau of Statistics, Balance of
Payments.
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• Financial Markets and Risk Premium

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The Share Markets Israel, the US and the
Emerging Markets, (1/6/2006100, 1/6/2006 -
20/06/08)
EM (EMERGING MARKETS)
NASDAQ
Israel (Tel Aviv 100)
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Israel 5 year Credit Default Swap 6/2003 - 6/2008
63
17
Israeli Shahar - US Government 10 Year Spread,
1/2006 - 6/2008

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• The Hi-Tech
• Sector

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ISRAEL ELECTRONICS INFORMATION INDUSTRIES 2007
- 20,700 M
Medical Systems
Civilian Comm. Telecomm.
8.8
22.9
Software
23.7
13.4
13.4
17.8
Components
Defense Systems
Industrial Equipment
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Engineering graduates per year in 2006

• Israel 8000 engineers /year (pop 7.2M) 0.11
• France 30 000 engineers/year, (pop 64M) 0.046
• UK 25 000 engineers/year (pop 60M)
  0.04
• USA 74 000 engineers/ year (pop 300M)
  0.024
• China 600 000 engineers/year (pop 1.3Bn) 0.0046
• India 400 000 engineers/year (pop 1.1Bn)
  0.036
• Japan 90 000 engineers/year (pop 127M)
  0.07

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Major Multinational Companies with a Design
Center in Israel
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