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DisclaimerThis presentation has been prepared by the State of Israel (the “State”) solely for informational purposes. For the purposes of this disclaimer, the presentation that follows shall mean andinclude the slides that follow, the oral presentation of the slides by the State or any person on its behalf, any question-and-answer session that follows the oral presentation, hard copies ofthis document and any materials distributed in connection with the presentation. This presentation does not constitute or form part of, and should not be construed as, an offer orsolicitation of an offer to buy or sell securities in any jurisdiction in which such an offer or solicitation of an offer is not permitted. This presentation does not contain all information that ismaterial to an investor. By viewing the presentation or by reading the presentation slides you agree to be bound as follows: This presentation is confidential and does not constitute or formpart of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, or a recommendation regarding, any securities of the State or Haifa PortCompany Ltd nor should it or any part of it form the basis of or be relied on in connection with (i) any contract to purchase or subscribe for any securities of the State or Haifa Port CompanyLtd, or (ii) any other contract or commitment whatsoever. This presentation does not contain all of the information that an investor may require to make an investment decision. Thispresentation has been made to you solely for your information and background for discussion purposes only and may be amended and supplemented. This presentation may not be reliedupon for the purpose of entering into any transaction.. This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or locatedin any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration orlicensing within such jurisdiction. This presentation and the oral remarks made in connection therewith contain forward-looking statements. The words “believe”, “expect”, “anticipate”,“intend”, “plan”, “estimate”, “expect”, “project”, “will”, “may” and similar expressions as well as statements other than statements of historical facts including, without limitation, thoseregarding financial position, economic and monetary policy, budgetary plans and objectives of the State for future development, constitute forward-looking statements, notwithstanding thatsuch statements are not specifically identified. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that may affect the State'sability to implement and achieve the economic and monetary policies, budgetary plans, fiscal guidelines and other development benchmarks set out in such forward-looking statements andthat may cause actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-lookingstatements. Such forward-looking statements are based on numerous assumptions regarding the State’s present and future policies and plans and the environment in which the State willoperate in the future, which are inherently uncertain. Furthermore, certain forward-looking statements are based on assumptions or future events that may not prove to be accurate. Risks,uncertainties and other factors that may affect such forward-looking statements include, but are not limited to: interest rates in financial markets outside Israel; the impact of changes in thecredit rating of Israel; the global and regional security situations; the economic growth and stability of Israel’s major trading partners, including the United States and European Union; theglobal high-tech market; regional economic and political conditions; global economic and business conditions in Israel; the security situation in Israel; present and future exchange rates of theIsraeli currency; foreign currency reserves; the level of domestic debt; domestic inflation; the level of budget deficit; the level of foreign direct and portfolio investment; and the level ofIsraeli domestic interest rates. The forward-looking statements in this presentation speak only as of the date of this presentation and the State expressly disclaims to the fullest extentpermitted by law any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations with regardthereto or any change in events, conditions or circumstances on which any such statement is based. No representation or warranty, express or implied, is made as to the fairness, accuracy orcompleteness of any information herein and no reliance should be placed on it. Such information has not been independently verified. All projections, valuations and statistical analyses areprovided for information and background for discussion purposes only. They may be based on subjective assessments and assumptions and may use one among alternative methodologiesthat produce different results. To the extent such projections, valuations and statistical analyses are based on historical information, they should not be relied upon as an accurate predictionof future performance. None of the State, its advisers, connected persons or any other person accepts any liability whatsoever for any loss howsoever arising, directly or indirectly, from suchinformation. Totals in certain tables and graphs may differ from the sum of the individual items in such tables and graphs due to rounding. The information contained herein is subject tochange without notice
Debt to GDP Ratio:59.9%
International Trade:
US$135 billion
Export/Import:78.7%
Population: 9.1 million
Inflation Rate:0.6%
Unemployment Rate3.8%
2010
Credit RatingAA- / A1
Member Since
Total GDP:
US$395 billion
GDP Per Capita:US$43,641
GDP Growth:3.3%
Israel in Numbers2019
* Source: Central Bureau of Statistics & OECD
4
Real GDP Growth
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
GDP Growth GDP Growth Per Capita
* Source: Central Bureau of Statistics & Ministry of Finance** GDP growth rate for 2020 is estimated by MoF and reflects the impact and consequences of COVID-19
3.7% average GDP growth rate 2010-1019 exceeded OECD, US and EU growth
20
20
E
Annual growth rate
5
Real GDP GrowthIsrael compared to advanced economies, Annual growth rate
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
OECD European Union U.S. Israel
* Sources: Central Bureau of Statistics, IMF & OECD
Israel experienced higher annual growth rates than most advanced economies
2020E
6
Inflation RateRate of change in consumer price index, Annual
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Inflation Change* Source: Central Bureau of Statistics** Dotted lines represent BoI Inflation Target range
Since 2014, the strength of the currency resulted in inflation below the target range
Operation Protective Edge
7
Inflation RateIsrael compared to advanced economies
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
OECD European Union U.S. Israel
Israel's inflation rate since 2015 has been consistently lower than the OECD, US and EU inflation rate
* Source: OECD
8
Public Debt and Deficit
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E
Public Debt Deficit
As percentage of GDP
Debt-to-GDP ratio declined by more than 10 percentage points over the past decade
* Source: Ministry of Finance
9
Decrease in Public Debt, 2010-2019
71%
2010
2019
International comparison, as percent of GDP
Israel is one of only a few countries which reduced their Debt-to-GDP ratio over the past decade
* Source: OECD
10
Unemployment and Participation RatesAges 25-64, Annual
72.0%
73.0%
74.0%
75.0%
76.0%
77.0%
78.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2012 2013 2014 2015 2016 2017 2018 2019
Unemployment Rate Participation Rate
* Source: Central Bureau of Statistics** According to CBS definition, the annual participation rate includes employed men and women aged 25-64, and unemployed who have been actively looking for work in the four weeks before conducting the employment survey
During the past decade, the employment participation rate has consistently grown despite the high population rate growth. Theunemployment rate has also consistently declined since 2010 to historically low levels (prior to the Covid-19 outbreak)
11
Unemployment RateIsrael compared to advanced economies, Ages +15, 2019
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Israel's unemployment rate during 2019 was amongst the lowest among advanced economies
* Source: OECD
12
Private expenditureILS Millions, Annual
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Private expenditure
The Israeli private expenditure grew by a compounded annual growth rate (CAGR) of 5% Since 2010
* Source: Central Bureau of Statistics
13
Import and ExportUSD Millions, Annual
-
20,000
40,000
60,000
80,000
100,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Export Import
The Israeli imports grew by a CAGR of 3% and the Israeli exports grew by a CAGR of 1% Since 2010
* Source: Central Bureau of Statistics
15
Real GDP
-6.0%
-1.0%
4.0%
9.0%
14.0%
19.0%
19
61
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
20
17
20
19
GDP Growth
* Source: Central Bureau of Statistics** GDP growth for 2020 is estimated by CBS and reflects the impact and consequences of COVID-19
The Covid-19 lockdown will lead to negative economic growth this year - a first for Israel.
20
20
E
Annual growth rate
COVID-19 OutbreakDot-Com Bubble
Israeli Banks’ stock crisis
Global Financial Crisis
16
UnemploymentAges 15+, Annual
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E
The lockdown has led to a sharp increase in unemployment
* Source: Central Bureau of Statistics
17
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F
State RevenueILS Billions
The Covid-19 lockdown will lead to a drop in state revenues
~60 ILS Billions
income loss
* Source: Ministry of Finance
18
Conclusion
Israel is the strongest economy in the East Mediterranean
>3% per annum GDP growth since 2000
$42.2k GDP per capita in 2019, ranked 1st among the East Mediterranean countries
Israel managed to reduce its public debt by over 10 percentage points during the past decade
Israel's 2019 unemployment rate hit historic low of 3.8%
Israel has a successful track record dealing with economic crises
For more information please contact
Ports Unit - GCA
+972 2-5421-552
Privatization of Haifa Port Company Ltd on GCA site (link)
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