January 12 th,

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2 Table of Contents 1 Main Indicators 2 Real Economy 3 Foreign Trade and Balance of Payments 4 Labor Market 5 Fiscal Stance 6 Price Stability and Monetary Policy 7 Innovative Economy 8 Learn More 9 Contact 2

3 Economic Figures Criteria Q3 2014Q4 2015Q1 2015Q2 2015Q3 GDP (current prices in $B)* Real GDP growth rate (% change) 2.6% 2.3% 1.1% 5.6% 2.3% 0.2% 2.0% GDP per capita (Current $) 37,272 35,231 9,479 8,889 8,552 8,823 8,941 GDP per capita growth rate (%, constant prices) 0.6% 0.3% -1.0% 3.3% 0.4% -1.6% -0.1% Exports (goods & services), $B (As % of GDP) 32.3% 31.3% 30.6% 33.4% 33.3% 31.4% 29.0% Imports (goods & services), $B (As % of GDP) 30.6% 28.2% 31.4% 30.9% 29.5% 28.0% 27.9% Unemployment rate 5.9% 5.2% 6.2% 5.6% 5.4% 5.1% 5.2% * Using a periodic average exchange rate. Source: CBS, IMF 3

4 Economic Figures Criteria Public debt (As % of GDP) 72.9% 75.1% 70.9% 68.9% 67.9% 67.2% 66.7% 64.9% General government expenditure 41.4% 41.5% 40.4% 39.6% 40.1% 40.4% 40.1% 40.1% (As % of GDP) Current account surplus (As % of GDP) 1.4% 3.9% 3.5% 2.6% 1.6% 2.9% 3.7% * 4.2% Inflation rate (CPI, yearly change, %) 3.8% 3.9% 2.7% 2.2% 1.6% 1.8% -0.2% *-0.9% Budget deficit (Central) (As % of GDP) 2.1% 4.8% 3.4% 3.1% 3.9% 3.1% 2.7% 2.1% * Last available data Source: CBS, IMF 4

5 Table of Contents Main Indicators Real Economy 3 Foreign Trade and Balance of Payments 4 Labor Market 5 Fiscal Stance 6 Price Stability and Monetary Policy 7 Innovative Economy 8 Learn More

6 GDP and Business GDP Annual rate of change, constant prices, 2010

7 GDP Growth Israel compared to advanced economies, annual rate of change, constant prices Since 2004, Israel s GDP growth rate has exceeded the average growth rate of advanced economies. In 2009, while most economies experienced a decline in GDP as a result of the global economic crisis, Israel maintained a steady 1.9% growth.

8 GDP Components Real annual percentage change fects of the global economic crisis

9 GDP per Capita $ U.S, Current prices, Current PPP, 2014 (or latest available)

10 Output Gap As percentage of Potential GDP, 2014

11 Stock Exchange Indices rcentage Change, the change since the beginning of period until the end of period

12 Table of Contents Main Indicators Real Economy 3 Foreign Trade and Balance of Payments 4 Labor Market 5 Fiscal Stance 6 Price Stability and Monetary Policy 7 Innovative Economy 8 Learn More

13 Exports of Goods and Services As % of GDP Effects of the global economic crisis

14 Main Export of Goods Destinations As a share of total exports of goods

15 Main Trading Partners $ US Billions, 2014

16 Current Account Surplus As % of GDP

17 Foreign Investments $ US Billions

18 Exchange Rates

19 al effective exchange rate of the NIS January 1990 = 100

20 Terms of Trade 2005 average = 100

21 Israel s Free Trade Agreements USA 2013 Colombia* QIZ Agreements EFTA 2014 India** 1998 Jordan Turkey 2004 Egypt Canada Mexico European Union (Association Agreement)

22 Bilateral Investment Treaties Albania Argentina Armenia Azerbaijan Belarus Bulgaria China Cyprus Czech Republic El Salvador Estonia Ethiopia Georgia Germany Hungary* India Kazakhstan South Korea Latvia Lithuania Macedonia

23 Bilateral Investment Treaties Slovenia Uzbekistan Montenegro Myanmar* Poland Romania South Africa* Thailand Turkey Turkmenistan Serbia Slovakia Ukraine Uruguay

24 ic Alliance (observer) Economic Organizations Membership in main international economic organizations is a member of leading international economic organizations: d Nations Organizations d Nations Agencies d Bank Group national Monetary Fund nal Organizations -Governmental Organizations

25 Table of Contents Main Indicators Real Economy 3 Foreign Trade and Balance of Payments 4 Labor Market 5 Fiscal Stance 6 Price Stability and Monetary Policy 7 Innovative Economy 8 Learn More

26 Unemployment and Participation As % of total labor force

27 Unemployment Rate Aged 15 and over, S.A, latest available monthly data

28 Job Creation Change in the number of employees Effects of the global economic crisis

29 Employment Rate Aged 15 and over, S.A, 2015 Q3 or latest available quarterly data

30 Table of Contents Main Indicators Real Economy 3 Foreign Trade and Balance of Payments 4 Labor Market 5 Fiscal Stance 6 Price Stability and Monetary Policy 7 Innovative Economy 8 Learn More

31 General Government Expenditure As % of GDP

32 General Government Tax Burden As % of GDP

33 Central Budget Deficit As % of GDP

34 Public Debt As % of GDP Effects of the global economic crisis

35 Public Debt As % of GDP, international comparison

36 Croatia Greece Luxembourg Avoidance of Double Taxation Austria Denmark India Belarus Estonia Ireland Belgium Ethiopia Italy Brazil Finland Jamaica Bulgaria France Japan Canada Georgia Latvia China Germany Lithuania

37 Portugal Sweden Vietnam Avoidance of Double Taxation Mexico Russia Taiwan Moldova Singapore Thailand Netherlands Slovak Republic Turkey Norway Slovenia UK Panama South Africa Ukraine Philippines South Korea USA Poland Spain Uzbekistan

38 Table of Contents Main Indicators Real Economy 3 Foreign Trade and Balance of Payments 4 Labor Market 5 Fiscal Stance 6 Price Stability and Monetary Policy 7 Innovative Economy 8 Learn More

39 Inflation Rate Rate of change in Consumer Price Index

40 Interest Rate

41 Central Bank s Interest Rates International comparison, last available data

42 Table of Contents Main Indicators Real Economy 3 Foreign Trade and Balance of Payments 4 Labor Market 5 Fiscal Stance 6 Price Stability and Monetary Policy 7 Innovative Economy 8 Learn More

43 Industrial Production Average annual growth average relative to 2005 average Total industrial production grew by 3.1%

44 Industrial Export rrent U.S. $ Billions, the share of high tech and mid high tech sectors in the Israeli goods exports 80.1% 79.5% 80.5% 81.0%.2% 72.5% 75.3% 75.4% 76.3% 76.6% 77.4% 80.9% 80.3%

45 Israel is a World Leader in Science, Technology and Innovation Global Innovation 2015 (R&D) IMD, Business expenditure on R&D, 2012 WEF, Capacity for innovation,

46 Israel in IMD Rankings IMD World Competitiveness Yearbook 2014 stitute for Management Development ranked Israel 24 th out of 60 ies for cyber security* r innovative capacity business expenditure on R&D (%) scientific research public expenditure on education r entrepreneurship of managers is widespread in business qualified engineers available in labor market r Nobel Prizes per capita in the fields of physics, istry, physiology, medicine and economics since 1950

47 Israel in WEF Rankings World Economic Forum Global Competitiveness Index orld Economic Forum ranked Israel 27 th out of 148 countries for n terms of competitiveness. n Innovation n Quality of scientific research institutions n Firm-level technology absorption n Strength of investor protection n Company spending on R&D n Nature of competitive advantage n Venture Capital Availability Global Competitiveness Report The country s main strengths remain its world-class capacity for innovation (3rd), which rests on innovative businesses that benefit from the presence of some of the world s best research institutions (3rd), support by the

48 Cooperation in Industrial R&D North America New York Massachusetts Maryland Virginia Wisconsin Colorado Illinois Oregon BIRD (Foundation) ario CIIRDF (Foundation) South America Argentina Uruguay Brazil Europe France Russia Italy (and Trento county) Germany Greece Czech Republic Bulgaria Lithuania Slovenia Denmark Hungary Turkey Portugal Finland Sweden Ireland Spain Cyprus Netherlands Asia China (Shanghai, Jiangsu, Shenzhen, Federal) India SIIRD-Singapore (Foundation) KORIL-RDF-Korea (Foundation) Australia (Victoria)

49 Table of Contents Main Indicators Real Economy 3 Foreign Trade and Balance of Payments 4 Labor Market 5 Fiscal Stance 6 Price Stability and Monetary Policy 7 Innovative Economy 8 Learn More

50 Learn More Visit the Israel Ministry of Finance English website for more information: About the Ministry Economic Overview of Israel Ministry of Finance publications and reports Other publications and reports on the Israeli economy Ministry press releases

51 Learn More o open: l Central Bureau of Statistics ank of Israel Ministry of Economy Ministry of Foreign Affairs Israel Government Portal

52 Table of Contents Main Indicators Real Economy 3 Foreign Trade and Balance of Payments 4 Labor Market 5 Fiscal Stance 6 Price Stability and Monetary Policy 7 Innovative Economy 8 Learn More

53 Contact Mr. Oded Keneresh, CPA Mr. Naor Porat Dr. Amichai Fishler Overseas Economic Information Chief Economist Department Ministry of Finance State of Israel Send us an Follow us on Twitter Follow us on Linkedin Follow us on YouTube Visit our Website

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