The Israeli Economy
Table of Contents
Background 3 Israel’s GDP 4 Financial Crisis 5 Interest Rates 5
Budget Deficit…………………………………………………………………………………………………………………………………………….. 7 Unemployment in Israel 8 Inflation in Israel 9 Balance of payment 10 Conclusion: 11 References 12
Background
Israel was under British mandate untill May 14, 1948 when it declared its independence. The Israeli economy is highly diversified open-economy that depends on imports of raw materials, crude oil, gains and military supplies. In spite of having very limited natural resources, Israel has a highly developed agriculture and industrial sector. The Israeli economy mostly relies on exports (45% of its GDP) and services such as high technology equipment, agricultural products (vegetables and fruits) and cutting diamonds.
United States Is considered to be a very important partner for Israel, since it omy mostly relies on exports ( States . , in fact almost half of the government 'steady growth allow the economy to come backis getting most of its military and economic help from the U.S, in fact almost half of the government external debt is owed to United States.
In the following report we would analyze Israel’s current macroeconomic position, mainly focusing on its GDP and its performance during the recession
Israel’s GDP
GDP – “The total market value of all final goods and services produced in a country in a given year”
(Investorwords, 2010).
The way to form the GDP formula would be as follows:
GDP is a sum of Consumption (C) , Investment (I) , Government spending (G) and Net exports (X-M) [ Y = C + I + G + (X – M) ] .
Source: Bank of Israel
Source: Bank of Israel
In the beginning of past decade economists in Israel were very optimistic about Israel’s economy after having a rapid growth rate of 9.1% in 2000. Unfortunately, there has been a serious set-back in the economy during the following two years
Background 3 Israel’s GDP 4 Financial Crisis 5 Interest Rates 5
Budget Deficit…………………………………………………………………………………………………………………………………………….. 7 Unemployment in Israel 8 Inflation in Israel 9 Balance of payment 10 Conclusion: 11 References 12
Background
Israel was under British mandate untill May 14, 1948 when it declared its independence. The Israeli economy is highly diversified open-economy that depends on imports of raw materials, crude oil, gains and military supplies. In spite of having very limited natural resources, Israel has a highly developed agriculture and industrial sector. The Israeli economy mostly relies on exports (45% of its GDP) and services such as high technology equipment, agricultural products (vegetables and fruits) and cutting diamonds.
United States Is considered to be a very important partner for Israel, since it omy mostly relies on exports ( States . , in fact almost half of the government 'steady growth allow the economy to come backis getting most of its military and economic help from the U.S, in fact almost half of the government external debt is owed to United States.
In the following report we would analyze Israel’s current macroeconomic position, mainly focusing on its GDP and its performance during the recession
Israel’s GDP
GDP – “The total market value of all final goods and services produced in a country in a given year”
(Investorwords, 2010).
The way to form the GDP formula would be as follows:
GDP is a sum of Consumption (C) , Investment (I) , Government spending (G) and Net exports (X-M) [ Y = C + I + G + (X – M) ] .
Source: Bank of Israel
Source: Bank of Israel
In the beginning of past decade economists in Israel were very optimistic about Israel’s economy after having a rapid growth rate of 9.1% in 2000. Unfortunately, there has been a serious set-back in the economy during the following two years
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