the israeli economy - export · israel economy | past & present 1984 2018 gdp per capita (us,...
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The Israeli Economy
From Economic Crisis to Stable Growth
M a y 2 0 1 9
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Israel The Land of
(Economic) Miracles
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Israel Economy | Past & Present
1984 2018
GDP per capita (US, current prices) 6,870 $ 41,180 $
Inflation Rate (Year End) 444% 1.1%
Current Account Balance
(% of GDP) -5.8% 2.0%
Budget Balance
(% of GDP) -15.3% -2.9%
Public Debt (% of GDP) 284% 60.5%
Net External Assets 18.8- B$ 126.6 B$
Source: EIU, CBS, Bank of Israel
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World trade growth (%)
GDP Growth | Global Comparison
Source: OECD, Central Bureau of Statistics, BOI
5.0%
4.2%
5.7% 6.2%
3.0%
1.4%
5.7%
5.1%
2.2%
4.3% 3.9%
2.6%
4.0% 3.5% 3.3% 3.2%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
OECD World Israel
Israel’s growth rate has exceeded the average growth rate of advanced economies
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Source: CBS, OECD
Av. growth rate, 2008-2018
One of the fastest-growing economies among all of OECD countries in the past decade
GDP Growth | Global Comparison
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
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Av. GDP growth & GDP Per Capita
GDP Growth | Global Comparison
Source: EIU, OECD. Avg 2008-2018
Turkey
Ireland
Israel
Poland South Korea
Chile Australia
Slovakia
Mexico New Zealand
Sweden Canada
Czech Republic
U.S
Switzerland
Germany Norway Hungary
U.K Austria
Belgium Netherlands Estonia France Slovenia
Denmark Japan
Spain
Finland
Portugal Italy
Greece
OECD - Av.
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000
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-18.0
-16.0
-14.0
-12.0
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Bu
dg
et
ba
lan
ce
(%
GD
P)
- M
ovin
g
Ave
rag
e
Go
ve
rnm
en
t D
eb
t (%
GD
P)
Fiscal Policy Budget balance & Government Debt | % GDP
Source: Bank of Israel
Maastricht Criteria – Government Debt
Maastricht Criteria – Budget Balance
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Monetary Policy Real Interest Rate* | 2019
Source: Bank of Israel
*Real Interest Rate = Nominal Interest Rate / Inflation Expectations
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
Jan
94
Sep
94
May
95
Jan
96
Sep
96
May
97
Jan
98
Sep
98
May
99
Jan
00
Sep
00
May
01
Jan
02
Sep
02
May
03
Jan
04
Sep
04
May
05
Jan
06
Sep
06
May
07
Jan
08
Sep
08
May
09
Jan
10
Sep
10
May
11
Jan
12
Sep
12
May
13
Jan
14
Sep
14
May
15
Jan
16
Sep
16
May
17
Jan
18
Sep
18
May
19
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Source: World Bank (2014)
Trade Policy Av. Import Taxes
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Ireland Japan Israel Rating Firm
A2 (Stable) A1 (Stable) A1 (Positive)
A+ (Stable) A+ (Stable) AA- (Stable)
A+ (Stable) A (Negative) A+ (Stable)
Israel’s Credit Ratings
Israel’s Highest-Ever Credit
Rating
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For the last 30 years - Exports of goods and services has been a major growth
engine in the Israeli economy
Exports of goods and services | 1980-2018 (B$)
6 13
20
31 28 28 31 37 41 44
51 59
47 57
65 61 63 64 57 56 59 61
3
5
8
16 13 12
14
16 17
19
21
25
22
25
29 32
36 36
37 39 45
50
1980 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Services Goods
*2018 – IEI Economic Unit Forecast
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Israel’s Innovation Innovation is the main growth engine of the Israeli export
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Source: The Bloomberg Innovation Index 2019
The Bloomberg Innovation Index 2019 World Most Innovative Economies
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Israel is 1st in the World in expenditure on R&D (research & development) as % of
GDP, demonstrating innovation, development and creativity.
Source: World Bank
Investment in R&D as % of GDP | 2010-2016 Av. | Leading Countries
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
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Source: The Bloomberg Innovation Index 2019
The Bloomberg Innovation Index 2019
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High Degree of Innovation The Global Competitiveness Index | 2018
Quality of scientific research institutions
University-industry collaboration in R&D
Company spending on R&D
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In the past decade the industrial export was mainly affected by the rapid
growth of the Hi-Tech industry
Industrial Exports | by sector, 1995-2018
-
5
10
15
20
25
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
B$
High - technology industries Medium - high technology industries
Medium - low technology industries Low - technology industries
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Low Tech Industries
7%
Hi-Tech Industries
49%
Med-Hi Tech Industries
30%
Med-Low Tech Industries
14%
22B$
3B$
6B$
14B$
Exports of Hi-tech products comprise about 50% of all Industrial Export
Industrial Exports | by sector, 2014-2018 Av.
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In Hi-tech services export grew dramatically over the past years, and has
become the main growth engine for export in recent years
Export of Services | 2002-2018
8.9 9.4 11.1 12.4 12.7 14.2 16.5 14.0 16.9 15.6 16.0 18.5 18.9 18.6 18.0 20.2 21.4 3.2 4.1
4.8 5.0 6.3
7.0 8.3
8.3 8.2
13.6 15.8
16.4 16.9 18.3 21.5
24.5 28.7
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *2018
Export of Hi-Tech Services Rest of Services
*2018 – IEI Economic Unit estimation
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Export by regional trade, 2002-2018 | in billions of USD
10.9 10.0
5.8
15.5 12.3
6.1
10.3
5.3
2.7
0
5
10
15
20
25
30
35
40
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Asia European Union USA
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Export by regional trade | in % Share of total
32.5% 33.6%
21.6%
14.3%
23.0%
29.2%
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
European Union Asia USA
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15%
10%
3%
6%
17% 4% 1%
30%
10% 4% Pharmaceutical products
Electronical components
Medical & Surgical equipment
Aircraft
Computing, Electronic & Optical equipment
Services for the Hi-tech Industry
Telecommunications Services
Computing services & Software
R&D Services (exc.start-up companies)
Exports of services from start-up companies
Source: IEICI Calculations & Estimations
Services
Industrial
High-tech Export totaled at 51.4B$ in 2018
46% of Israel’s Export
Hi-tech Sectors | Industrial & Services
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Number of Technological Startups
5,000
3,000 2,500 2,500
TLV London Berlin Paris
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Total VC Investments | 2013-2018
6-year consecutive growth!
During 2018 Israeli hi-tech
companies raised 6.5 B$
in 623 transactions 2.4
3.8
4.8 5.1
5.5
6.5
-
1
2
3
4
5
6
7
2013 2014 2015 2016 2017 2018
Bill
ion
s o
f U
SD
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0.8 0.6 1.0
0.5 0.5
4.7 6.0
7.8
5.8
10.6
-
2
4
6
8
10
12
2014 2015 2016 2017 2018
Bill
ion
s o
f U
SD
Israeli Buy Side M&A Deal (M$)
Foreign Buy Side M&A Deal (M$) 2018 experienced a
significant increase in the
number of acquisitions of
Israeli targets by foreign
buyers compared to
previous years
Acquisitions of Israeli Companies | Foreign and domestic 2014-2018
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Acquisitions of Israeli Companies | By country of origin 2014-2018
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Number of Israeli High-Tech M&As | By Sector
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More than 300 Multinational R&D centers In Israel
Tele-communications
New Media
Software
Electronics
Life Science Medical Dev.
Life Science Bio & Pharma
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Israel’s Economy - Summary
Open Economy Export Oriented Growth High Skilled Human Resources Rapid Development of Technology & Hi-Tech Industries Entrepreneurial Culture (Start Up Nation)
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THANK YOU