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	Israel		Info-Prod Country Guide
CHARACTERISTICS   INDICATORS   THE ECONOMY   PRINCIPAL SECTORS   INVESTMENT ISSUES   PROJECTS   PROSPECTS

The Economy Inflation Rate Israel's 1996 inflation rate was 10.6 percent, but in the second half of the year the annualized rate fell to less than seven percent, reflecting the downturn in the Israeli economy. Exchange Rate The New Israeli Shekel (NIS) has been fairly stable over the last few years in world markets. The annual average US Dollar exchange rate was 2.83 in 1993; 3.1 in 1994 and 1995; and 3.2 in 1996. During the first two months of 1997, however, the dollar appreciated to 3.3. Foreign Debt Israel's foreign debt stood at US$ 17.7 billion in 1994. It is worth noting, however, that although Israel's total and external debt is higher than desirable, Israel's foreign debt situation is relatively better than that of certain European countries, including Italy and Belgium, and that the quality of Israel's debt servicing is at least on a par with many European Union states. Labor Force A relative slow-down in industry as wellas dislocations caused by the 1991 Gulf War stemmed the growth of Israel's economy through 1992 and brought about an unemployment rate of over 11 percent. Though by the end of 1995 the unemployment rate had dropped to 6.5 percent, due to renewed weakness in the economy, the unemployment rate increased again in 1996 and the beginning of 1997 to around 7 percent, the highest level since the beginning of 1995. A high proportion of Israel's labor force is highly skilled and well-trained. The national literacy rate is higher than 90 percent; many Israelis speak several languages, and, often, are fluent in English. Israel has more scientists and technicians per capita than any other country in the world. About 30 percent of the population has at least thirteen years of education, and about 20 percent of the population holds academic degrees. Almost one quarter of the work force is involved in scientific, academic or technical professions. Another quarter is employed in industry. Israel publishes more scientific articles per capita than any other country in the world. Israel's labor force is not cheap, although average wages are lower than those prevailing in Europe or in the United States. Israel, however, has an especially professional labor force. Productivity in the high-tech fields increased from US$ 45,000 in sales per worker in 1985 to about US$ 90,000 presently. Immigration Of major importance to the Israeli economy is the large number of immigrants who have been absorbed into the economy since 1989. Many of the immigrants hail from the former Soviet Union and are highly skilled. Although the process of absorbing new immigrants has encountered some difficulties over the past five years, this body of immigrants provides a wealth of professional and technological resources that has the potential for spurring economic growth, both in terms of know-how and in terms of supply and demand. According to figures provided by the Israel Central Bureau of Statistics (CBS), since 1990 over 600,000 immigrants have arrived in Israel, and they comprise about 10 percent of Israel's population today. According to CBS statistics, some 250,000 of these immigrants reported working abroad prior to their immigration to Israel; 57,000 registered themselves as engineers, writers and journalists, and 12,000 as nurses or paramedics. Over 200,000 of the immigrants have over thirteen years of education. A large number of these immigrants have already been absorbed into the Israeli economy. Over the years 1990 to 1994 unemployment amongst immigrants decreased from 50 percent to 15 percent, although only 30 percent of immigrants who have entered Israel in the last five years have succeeded in finding work in their original professions. Previous Chapter Contents Menu Next Chapter

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