Economy - overview Israel has a technologically advanced market economy with substantial government participation. It depends on imports of crude oil, grains, raw materials, and military equipment. Despite limited natural resources, Israel has intensively developed its agricultural and industrial sectors over the past 20 years. Manufacturing and construction employ about 28% of Israeli workers; agriculture, forestry, and fishing only 2.6%; and services the rest. Israel is largely self-sufficient in food production except for grains. Diamonds, high-technology equipment, and agricultural products (fruits and vegetables) are leading exports. Israel usually posts sizable current account deficits, which are covered by large transfer payments from abroad and by foreign loans. Roughly half of the government's external debt is owed to the US, which is its major source of economic and military aid. To earn needed foreign exchange, Israel has been targeting high-technology niches in international markets, such as medical scanning equipment. The influx of Jewish immigrants from the former USSR topped 750,000 during the period 1989-97, bringing the population of Israel from the former Soviet Union to one million, or one-sixth of the total population. Initially this great influx increased unemployment, intensified housing problems, and strained the government budget. At the same time, the immigrants bring to the economy scientific and professional expertise of substantial value for the future.

GDP purchasing power parity - $96.7 billion (1997 est.)

GDP - real growth rate 1.9% (1997 est.)

GDP - per capita purchasing power parity - $17,500 (1997 est.)

GDP - composition by sector
agriculture: 2%
industry: 17%
services: 81% (1997 est.)

Inflation rate - consumer price index 9% (1997)

Labor force
total: 2.3 million (1997)
by occupation: public services 31.3%, manufacturing 20.2%, finance and business 13.1%, commerce 12.8%, construction 7.5%, personal and other services 6.4%, transport, storage, and communications 6.2%, agriculture, forestry, and fishing 2.6% (1996)

Unemployment rate 7.7% (1997)

Budget
revenues: $55 billion
expenditures: $58 billion, including capital expenditures of $NA (1998 est.)

Industries food processing, diamond cutting and polishing, textiles and apparel, chemicals, metal products, military equipment, transport equipment, electrical equipment, potash mining, high-technology electronics, tourism

Industrial production growth rate 5.4% (1996)

Electricity - capacity 7.736 million kW (1996)

Electricity - production 32.5 billion kWh (1996)

Electricity - consumption per capita 5,387 kWh (1995)

Agriculture - products citrus and other fruits, vegetables, cotton; beef, poultry, dairy products

Exports
total value: $20.7 billion (f.o.b., 1997)
commodities: machinery and equipment, cut diamonds, chemicals, textiles and apparel, agricultural products, metals
partners: EU 32%, US 31%, Japan 7% (1996)

Imports
total value: $28.6 billion (c.i.f., 1997)
commodities: military equipment, investment goods, rough diamonds, oil, consumer goods
partners: EU 52%, US 20%, Japan (1996)

Debt - external $18.7 billion (1997)

Economic aid
recipient: $1.2 billion (1997) from the US

Currency 1 new Israeli shekel (NIS) = 100 new agorot

Exchange rates new Israeli shekels (NIS) per US$1 - 3.5340 (December 1997), 3.4494 (1997), 3.1917 (1996), 3.0113 (1995), 3.0111 (1994), 2.8301 (1993)

Fiscal year calendar year (since 1 January 1992)

NOTE: The information regarding Israel on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Israel Economy 1998 information contained here. All suggestions for corrections of any errors about Israel Economy 1998 should be addressed to the CIA.