The strength of the Israeli economic system was officially recognized when Israel became a member of OEDC Organization for Economic Co-operation and Development in May 2010.

FTAs with the EU and NAFTA:

Israel is the lone state who has free trade understandings with both the European Union and NAFTA ( United States, Canada and Mexico ) .

Gross Domestic Product ( GDP ) :

Israel ‘s Gross Domestic Product was deserving 242.93 billion US dollars in 2011, as per the study published by the World Bank. The GDP value of Israel is tantamount about 0.39 % of the universe economic system.

GDP Growth Rate:

The Gross Domestic Product ( GDP ) in Israel expanded 0.70 % in the 3rd one-fourth of 2012 with regard to the old one-fourth. The mean GDP growing rate is 1 % from 1980 to 2012.

GDP Annual Growth Rate:

Israel ‘s Gross Domestic Product ( GDP ) expanded 3.12 % in the 3rd one-fourth of 2012 over the same one-fourth of the old twelvemonth. Taking the norm from 1996 to 2012, Israel GDP Annual Growth Rate is 3.88 % .

GDP per capita:

The GDP per capita of Israel was 22859.68 US dollars in 2011, as per a study published by the World Bank. The GDP per Capita in Israel is 185 % of the universe ‘s mean GDP pae capita. Taking the norm from 1960 until 2011, Israel GDP per capita is 14315.57 USD.

GDP Deflator:

Harmonizing to a study of Israeli Central Bureau of Statistics, GDP Deflator of Israel increased to 116.21 Index Points in May of 2012 over the 113.53 Index Points in February of 2012.

Gross National Product:

Israel Gross National Product ( GNP ) increased to 224168.90 ILS Million in May of 2012 over the 220941.10 ILS Million in February of 2012, harmonizing to a study of Central Bureau of Statistics, Israel.

Consumer Price Index ( CPI ) :

The Consumer Price Index ( CPI ) of Israel increased to 106.20 Index Points in August of 2012 from 105.10 Index Points in July of 2012. Taking an norm from 1951 to 2012, Israel Consumer Price Index ( CPI ) is 29.97 Index Points.

Inflation Rate

The rising prices rate of Israel, recorded in October 2012, was 1.80 % .


Israel Imports:

Israel has hapless natural resorts, so that it imports the crude oil, coal, nutrient, untrimmed diamonds, other production inputs, and military equipment. The chief imports come from European Union, United States and China. Israel ‘s import was 6987.6 USD Million in October 2012.

Israel Exports:

Isral ‘s major exports are machinery and equipment, package, agricultural merchandises, cut diamonds, chemicals, fabrics and dress. Main export spouses are European Union, United States, Hong Kong, India and Turkey. Israel ‘s export was 4434.40 USD Million in October 2012. Israel ‘s exports, around half, manufactured goods involve advanced engineering systems but Israel ‘s traditional mid-tech and low-tech industries are staying strong.

The Entire Exports in the first eight months of 2010 was $ 38.9 billion compared with $ 29.6 billion in the corresponding period of 2009. The imports of $ 38.4 billion in the first eight months of 2010 compared with imports of $ 29.9 billion in the corresponding period of 2009, we can state, Israel has a little positive balance of trade.

Israel withstands the recession:

The first ground was a strong regulative system and a moderate banking tradition kept its Bankss off from recession. The 2nd ground was the snap of labour market in get bying with the new world. The 3rd ground was Israelis cut the lasting goods outgos, but mostly kept the nondurable goods passing even with pre-recession degrees, cutting into personal nest eggs to “ smooth out ” the bead in income.

A long term Potential:

Israeli economic system was built from abrasion, survived legion crises and terrible economic want, and has eventually known as a successful, free market economic system whose citizens enjoy a high criterion of life.

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Monetary policy is concerned with the use of the supply of money in the economic system.

It affects the economic system chiefly through its impact on involvement rate. It can command the flow of money by using its assorted tools like bank rate, unfastened market policy etc.

Israel ‘s pecuniary policy model is loosely sound & A ; robust. In order to cut down the rising prices rate to the low individual figure, Israel has framed the pecuniary policy consequently.

The bank of Israel has been step ining to a great extent in the foreign exchange market. As a consequence in 2003, the rising prices rate was 1-3 % which is similar to most developed economic systems.

Israel uses quarterly studies to pass on to the market and the populace about the province of the economic system through quarterly information study. By March 2009, the foreign exchange modesty increased to USD 40.6 billion which had reached a really high degree comparison to any unfastened economic systems. In grand 2009, the bank of Israel has announced its new policy of discretional intercession.

Fiscal policy is concerned with the disbursement and revenue enhancement enterprise of the authorities. It is considered one of the most direct tool to excite or dumpen the economic system. An addition in authorities disbursement stimulates the demand of goods and services, while a lessening consequences in lessening in the demand of goods and services.

In the same mode lessening in revenue enhancement, it increases the ingestion of goods and services and increase in revenue enhancement rate diminish the ingestion of goods and services.

Israel has achieved a mark conveying down the rising prices to healthy individual figure degree, one of the grounds is to cut down the authorities disbursement and put more accent on market based economic system.

The economic roar between 2004 and 2008 resulted in rapid growing of the state and as a consequence it was be possible to cut down in revenue enhancement gross and public disbursement. The budget included lasting additions in revenue enhancements on gasolene ( by 12.5 % to NIS 2.696 per litre ) and baccy.

A new agenda of purchase revenue enhancements on autos has besides been introduced that increases the rates on many types of vehicles. There were impermanent additions in the VAT rate ( from 15.5 to 16.5 % ) , in charges on H2O ingestion ( labeled as a “ drought charge ” ) and in the ceiling on parts to national insurance.

All of these are due to end at the terminal of 2010.To its recognition, the 2009-10 budget managed to maintain ( more or less ) to the legislated disbursement regulation and the brightening economic mentality suggests the shortages will be less than those estimated in the budget.

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Investing Climate IN ISRAEL

Israel is parliamentary democracy and enjoys a diversified economic system. Services, fundamentally fiscal and concern, construct up the primary portion of the Israeli economic system.

Israel in the recent old ages has seen enormous developments and fabricating activities in the field electronics, communications and other technology-driven industries.

However Low engineering oriented industries like chemicals, plastics and nutrient are besides of import and traditionally made of import parts to prolong the economic system.

As such, Israel derives it competence from Research & A ; Development ( R & A ; D ) in which holds important comparative advantage over the other states, stemming from superior instruction and encouraging policies set up by the Israeli authorities.

Israel ‘s failing lies in its insufficiency of natural resources. It becomes necessary to import natural stuffs and many other goods and services. The state hence, depends on its exports to pay for such goods and services.

Israel ‘s major imports include investing goods like heavy machinery and vehicles, natural stuffs and fuel. Israel ‘s major exports are electronics, package, diamonds and chemicals.

The Electronic & A ; telecommunication sector in Israel is shortly emerging as the most of import sector of the economic system with authorities fueling many of import R & A ; D activities in the state.


Foreign Trade forms the pillar of the Israeli economic system. Israel has been steadily following the policy of liberalisation easy opening up its economic system to planetary trade.

Governments in Israel have shown considerable resoluteness to advance foreign trade and have shown committednesss to free trade. Israel has established strong trade relationships with many states of the Earth, puting up an extended web of trade understandings particularly with states of North America, Europe and Asia.

Free Trade Agreements history to about 80 % of Israel ‘s foreign trade. Israel ‘s premier economic trade dealingss are with U.S. and Europe, with U.S. representing most of the imports to Israel.

Israel became a full member of Organization for Economic co-operation and Development ( OECD ) in 2010.

Banking AND Financing IN ISRAEL

The banking sector in Israel holds a dominant place in the state ‘s fiscal system and plays a polar function in the overall economic system.

The banking sector in Israel has gone through an array of reforms with the denationalization of banking in the state.

Commercial Bankss in Israel offer an array of retail and corporate banking installations runing from securities firms in capital market, both local and foreign, renting, underwriting, investing banking, common fund and other such plus direction installations.

The Central Bank of Israel is responsible for the given activities:

Specifying and implementing the pecuniary policy

Enforcing controls on the local Bankss

Keeping the supply of notes and coins in the market

Pull offing the foreign exchange militias of the state

Representing the state of planetary fiscal forums.

Israel ‘s major fiscal establishments are headquartered in Tel Aviv which is the state ‘s commercial capital similar to Mumbai in India.


The authorities of Israel over the old ages has been steadily following the policy of liberalisation easy opening up the economic system for planetary investings. The Government has shown enormous resoluteness in promoting Foreign Direct Investments in the state by puting encouraging policy model and supplying an array of benefits and inducements to foreign investors to hike Industry & A ; commercialism in the state.

Harmonizing to Israeli jurisprudence, anterior authorities blessing is non necessary except for investings regulated sectors like Bankss. Israel follows restrictive policies merely for investings in strategic sectors.

The major avenues for investing in Israel are Electronics & A ; Telecommunication, biotechnology and medical instrumentality. Israel has seen major investings in the engineering sector with planetary giants like Microsoft, Cisco, Intel, Siemens, Motorola, HP etc. puting up province of the art R & A ; D installations in Israel.


The authorities of Israel has shown its committedness to promoting the growing of FDI by a series of regulative alterations as given:

The authorities has reduced both duty and non-tariff barriers

It has reformed the revenue enhancement model by cut downing labour revenue enhancement, income revenue enhancement and corporate revenue enhancement.

It has offered investing grants, revenue enhancement benefits and freedoms to hike foreign investing through the “ Law for Encouragement of Capital Investments ”

The authorities grants conditional R & A ; D grants of up to 50 % of sanctioned plans under the “ Law for Encouragement of Capital Investments ” .

The corporate revenue enhancements has lessenings from 25 5 in 2010 to 24 % in 2012 to further the industrial growing and foreign investing in the state.

The office of the Chief Scientist ( OCS ) provides adept aid to the industry for advancing R & A ; D activities in the state.


In Israel minutess in all types of foreign currency is permitted except for those restricted under jurisprudence or due to some specific grounds. So, as such there is no foreign currency limitation in Israel.


Assorted grounds as to why companies should put in Israel are:

A gifted work force

Booming engineering sector

High acumen of scientific research

Infrastructure and supportive authorities policies.

Because of these assorted grounds favourable to industry giants like Microsoft, Cisco, IBM, Intel, etc have already established R & A ; D centres in Israel.

Entrepreneurial Spirit

Israel has emerged as a really of import centre for start-up endeavors. The state ‘s strong engineering orientation clubbed with entrepreneurial spirit to introduce and strong R & A ; D certificates have elevated Israel as the following entrepreneurial hub of the universe. Of the many Israeli entrepreneurial projects to go planetary success narratives are Checkpoint and Teva Pharmaceuticals.

Path Record

Israel ‘s faultless path record has in peculiar attracted the attending of the planetary investing community. Israeli authorities had shown enormous resoluteness in explicating policies so as to do the investing clime in the state encouraging and attractive. FDI grew from 4600 million in 1993 to 415 million in 2007. The entire venture capital investings in Israel have grown in surplus of $ 11 billion. Israel resoluteness has been rewarded by the International recognition evaluation bureaus which have systematically sustained its recognition evaluation and affirmed their assurance in Israel ‘s economic system.

Always Introducing

Israel ‘s R & A ; D investing per GDP is the highest in the universe. Entrepreneurship and invention profoundly rooted in the state. Israel has invariably shown a great resoluteness and committedness in back uping and fostering entrepreneurship and invention. Israel ‘s many high tech brooders have been invariably back uping immature companies with 200 active undertakings and over 735 little undertakings in the past old ages.

Top Academic Education

The root to high graded entrepreneurship and invention in Israel lies in the strong instruction background that the state possesses. Israel has the universe ‘s most educated work forces. Israel holds enjoys the universe ‘s highest ratio of qualified applied scientists in the work force. It besides enjoys the universe ‘s highest ratios in footings of University grades and academic publications per capita. Israel ‘s premier instruction establishments have invariably featured among the universe ‘s best instruction establishment doing it one of the preferable finishs by pupils prosecuting quality higher instruction.

Solving Problems and Creating Opportunities

Israel characteristics in the list of the states giving the highest per centums of their economic activities to fund R & A ; D activities. Israel ‘s best inventions have resulted by convergence of first-class job work outing accomplishments with exceeding creativeness. Exceptional R & A ; D activities supported by a extremely trained pool of research workers and applied scientists have resulted in Israel developing some cutting border engineerings particularly in the field of defence.

Israel ‘s competences: Israel has shown great developments in engineering, R & A ; D and inventions in general. Israel peculiarly excels in the Fieldss as given:




Agro engineering


Safety & A ; Security

Diamond film editing


Electronic & A ; Telecommunications