October 4 th 2011 The Israeli Economy. GDP ($Billion) 218 Population (7/2011, Million) 7.8 GDP per capita ($) 28,575 Foreign Trade (% of GDP) 72% Total

October 4th 2011

The Israeli Economy

• GDP ($Billion) 218• Population (7/2011, Million) 7.8 • GDP per capita ($) 28,575• Foreign Trade (% of GDP) 72% • Total Exports (% of GDP) 37%• Unemployment (7/2011) 5.4%

The Israeli Industry

• Share of business sector 21% • Industrial Sales ($Billion) 95• Industrial Exports (% of sales) 43% • Employees 350K• Main branches: Chemicals, Electronics & Food2

The Israeli Economy – 2010 Facts & Figures

The Manufacturers' Association of Israel

Israeli Economy

Strengths


3

The Resilience of Israeli Economy during 2008/9 Global Crisis

Positive Growth in Israel Vs. Regression in Most Developed Countries

4The Manufacturers' Association of Israel

0.8%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Fin

lan

d

Ru

ssia

Irel

and

Mex

ico

Jap

an

Sw

eden

Ital

y

UK

Ger

man

y

Tu

rkey

Den

mar

k

Net

her

lan

ds

Au

stri

a

Sp

ain

Bel

giu

m

Po

rtu

gal

US

A

Can

ada

Fra

nce

Gre

ece

Sw

itze

rlan

d

So

uth

Afr

ica

New

Zea

lan

d

No

rway

Bra

zil

Sau

di

Isra

el

Au

stra

lia

Po

lan

d

Ind

ia

Ch

ina

Source: IMF October 2010

Developed and selected major emerging market countries,Real GDP growth, 2009

A Short Recession in the Israeli Economy During 2008/9 Global Crisis


5

3.6%

1.0%

-2.1% -2.6%

1.8%

3.5%

5.0%5.6% 6.1%

4.6%

7.5%

4.7%

3.5%4.2%

0.7%

-3.2%-4.4%

2.7%3.5%

5.1%

7.9%7.3%

4.8%

8.7%

5.3%

2.4%

Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11

GDP Business GDP

GDPReal Changes in GDP, Each quarter against Previous, at Annual Rate, S.A. Data

4%

-1%

-4% -4%-5%

-6%

-9%-10%-10%-11%-11%

-12%-12%

-15%-16%

-17%-18%-18%

-21%

Real Industrial Output Change, 2009 compared to 2008

ʺ ʥhʥ́ʤ̋ ʥhʩʣʮʤʯʩʡʤʩʩ́ ʲ ʺ ʤʩʢʥʥʩɦʺ ʥyʣʢʤʡʭʩʬʷʭʩʬʣʡʤʭʩʮʩʩ̫ʥʯʫ̋ ʩ

Relatively Moderate Regression in Israeli Industry during 2008/9 Crisis

Source: OECD, CBS & MAI Economic Research Department The Manufacturers' Association of Israel 6

Export Oriented Growth

7


7%

41%34% 27% 31%

54%62%

80%

102%

120%

102%

134%141%

0%

1%

12%

6%

4% 4%11%

15%

26%32%

42%

33%

44% 46%

Jan.-Aug. '11

Industrial Exports

Industrial Production

Export = 43% of Sales

Export Oriented Growth in IndustryReal Cumulative Rate of Change, Since 1998

Export = 31% of Sales

Strong starting pointRapid Growth in Israeli Economy

The Manufacturers' Association of Israel 8

GDP GDP per Capita Business Sector GDP

5.1%

3.2%

6.9%

4.9%

3.0%

5.8%5.6%

3.7%

6.8%

5.5%

3.6%

6.1%

4.0%

2.2%

4.5%

0.8%

-0.9%

0.3%

4.8%

2.9%

5.8%

5.0%

3.1%

5.6%

2011 Est.

Real Annual Changes

A Continuous Decrease in Unemployment Rate

9

10.3% 10.7% 10.4%

9.0%8.4%

7.3%

6.1%

7.5%6.6%

5.6%

2011 Frcst.

Unemployment RateAs Percent of Civilian Labor Force

The Manufacturers' Association of Israel * M.A.I Economic Research Department early estimates.

2.6%

0.3%

-1.8%-2.2%

-5.0%

-0.9%

0.6%

1.8%

3.2%

5.1%

2.7%

0.9%

3.6%

2.9%

ASurplus in The Balance of Payments Current AccountAs Percentage of GDP

Independent of Outside Funding A Continuing Current Account Surplus

Source: CBS & MAI Economic Research Department


10

The combination of a continual surplus in the current account and the large amount of foreign currency reserves, enable Israel to provide its import needs without dependence on external financing.

High Private Saving Rate in Israel


11

Source: OECD & CBS

Household saving rates - Percentage of disposable household income, 2009

2.2%

5.9%

11.1%12.9%

13.4%16.8%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

DenmarkSlovak Rep.

JapanPoland

HungaryKorea

FinlandCzech Rep.

CanadaAustralia

United StatesNetherlands

ItalyNorwayIrelandAustria

SwitzerlandGermany

SwedenBelgium

Israel

Source: OECD & CBS

Household saving rates - Percentage of disposable household income, 2009

Bank Regulatory Capital to Risk-Weighted


12

0.0

5.0

10.0

15.0

20.0

25.0

Belg

ium

Icel

and

Sing

apor

eLu

xem

bour

gSw

itzer

land

Japa

nG

erm

any

Den

mar

kCa

nada

Aus

tria UK

Czec

h Re

p.U

SAFi

nlan

dIr

elan

dKo

rea

Net

herl

ands

Isra

elN

orw

ayCy

prus

Swed

enSl

ovak

Rep

.It

aly

Fran

ceG

reec

eSp

ain

Slov

enia

Aus

tral

iaPo

rtug

al

22.1

15.3 14.3

10.8

2010

Source: IMF

0

10

20

30

40

50

6061.2

5.43.3

1.7 1.5 0.4

Bank Nonperforming Loans to Total Loans -Low Ratio in Israel Percents, 2009

Bank Nonperforming Loans to Total Loans -Low Ratio in Israel

13

The Manufacturers' Association of Israel Source: IMF

Nominal Change in Average Apartment Price, 1997-2007

Real Estate Prices Before 2008/9 Crisis: Relatively Moderate Increase

Source: Psagot Investment HouseThe Manufacturers' Association of

Israel

14

House Prices

15

The Manufacturers' Association of Israel Source: OECD, CBS

-33.7%

-13.9%-10.7%-10.4%

-4.1% -2.5% -2.0% -0.1%

3.6%6.7%

9.0% 9.1% 10.1%10.3%12.9%13.1%

21.1%

43.8%

ʮʡʺ ʸ ʫʩhʤʩʩʬʲʺ ʩʮʥʠʬʰʩʡʤʠʥʥ́ʤʡʬʠʸ ʹ ʩʡʺ ʥyʩʣʤʩyʩʧCumulative change ratess, 2010 average compared to 2007 average

High Share of ICT in the Business Sector

ICT= Information & Communications Technologies, 2006

Source: Israeli CBS The Manufacturers' Association of

Israel

16

15.9 14.8

13.7

12.1

10.9 10.8 10.7

9.2 8.7 8.4 8.3 7.9 7.9 7.9 7.6 7.6 7.5 7.5 7.1 7.1 6.9 6.8 6.7

5.0

ICT Sector GDP, Out of The Business Sector GDP 2006

2010

15.7

%

To Industrial Output To Employment in Industry

To Industrial Export

71%65%

75%

The High Tech Sector Contribution to Industrial Growth in 2004-20

As Percentage of Total Growth

The High Tech Sector Contribution to Industrial Growth


2004 – Q2/2011

Including 8/2011))

Global R&D and Innovation Center

18


World Leadership in Civilian R&D Investments

Source: Israeli CBS The Manufacturers' Association of Israel

19

4.5%4.0%

3.5%

3.0% 3.0%

2.1%2.0%2.0%

1.5%

1.0%

Israel is The World Leader in Civilian R&D InvestmentAs Percentage of GDP, 20 9

2010

4.

4%

Other Asia US EU

23%

15%

28%

34%

24%

18%

26%

32%

Jan. -Aug. 2011

Distribution of export according to areasDiversion of Trade to Asian Countries


3.8%

1.1%

-1.2%

-2.4%

0.3%

-1.1%-1.6%

-2.1%

-4.2%

-2.1%-1.8%

-0.3%

0.6%1.2% 1.4%

-0.5%

0.4%

Real Wage in Business SectorReal Changes, Compared to the Parallel Period in a Previous Year

Employment Flexibility


Real Decrease in Wages at the Israeli Business Sector During 2008/9 Global Crisis

21

Extraordinary measures during 2008/9 crisis including: 1.Reducing Overtime2.Concentrated Vacation3.Non Payment Vacation4.Shortened Workweek

-0.3%

0.4%

1.7%

-0.2%

-0.7%

0.4%

1.3%

1.7%

2.0%

-0.6%

0.4%

1.2%

Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11

Workers in the Business SectorChange rates, each quarter against previous quarter, S.A. data

18,000 employees were fired

18,000 employees were fired

+128,000 employees+128,000 employees

אגף כלכלה22

Relatively moderate Dismissals During 2008/9 Global Crisis

Workers in the Business Sector

6%

5.5%

3%

2%

5.2%

3.7%

Target Deficit Actual Deficit

As percent of GDP

Responsible Fiscal PolicyRestrained Government Budgetary Deficit


23

Source: Ministry of Finance

Relatively Low Government Deficit in Israel

Source: Eurostat, IMF, MOF


32.4%

10.6% 10.5% 10.4% 9.5% 9.2% 9.1%7.0%

5.4%4.6% 4.1% 3.7% 3.3% 2.7% 2.5%

0.0%

Israel’s Government Deficit is Relatively LowAs Percent of GDP, 2010

Continuous Reduction of Public Debt Ratio


Source: Ministry of Finance

25

99 97.493.8

84.578.3 77.2 79.6

76.6

Continuous Reduction of Public Debt Ratio

Public Debt as Percentage of GDP

Relatively Low Public Debt Ratio


Source: Ministry of Finance, Eurostat, IMF

26

220.3%

142.8%

119.0%

96.8% 96.2% 93.0% 91.6%83.2% 81.7% 80.0% 76.6% 72.3%

62.7% 60.1% 55.0% 48.4% 43.6% 39.8%

As percent of GDP, 2010

10%

10%

12.5%

16%

17%

19%

20%

21%

22%

23%

24%

25%

25%

26%

26%

28%

30%

31%

33%

Cyprus

Bulgaria

Ireland

Rumania

Singapore

Hungary

Russia

Switzerland

EU average

Greece

Israel

Austria

Denmark

Finland

Sweeden

U.K.

Spain

Italy

France

Corporate Tax - 2011

INDUSTRIAL COMPANIES WITH EXPORT CAPABILITYINDUSTRIAL COMPANIES WITH EXPORT CAPABILITY2011-12: 15% - 10%

2013-14: 7% - 12.5%2015: 6% - 12%

INDUSTRIAL COMPANIES WITH EXPORT CAPABILITYINDUSTRIAL COMPANIES WITH EXPORT CAPABILITY2011-12: 15% - 10%

2013-14: 7% - 12.5%2015: 6% - 12%

27

2011

Source: KPMG, www.worldwide-tax.com

Corporate Tax

Israeli Economy

Weaknesses


28


29

Gini Index in the OECD

Source: OECD

0.232

0.312

0.379

0.474

Den

mar

kSw

eden

Luxe

mbo

urg

Aust

riaSl

ovak

iaCz

ech

Repu

blic

Finl

and

Belg

ium

Net

herla

nds

Nor

way

Switz

erla

ndIc

elan

dFr

ance

Hun

gary

Ger

man

yAu

stra

liaO

ECD

Kore

aCa

nada

Spai

nG

reec

eJa

pan

Irel

and

New

Zea

land U

KIt

aly

Pola

ndIs

rael

USA

Port

ugal

Turk

eyM

exic

o

Gini index in the OECD

Isra

el

46.3%

60.2%

64.6%

78.9%

Employment RateAs percentage of working age popualtion, 2010

Relatively Low Employment Rate

30

The Manufacturers' Association of Israel Source: OECD

Standard of LivingRelatively Low GDP Per Capita

31


44

84

100

138

164

Gross domestic product per capita Index )OECD=100), Based on PPP, 2010

The Background to the Protests: High Cost of Living

25.1%

23.4%

15.3%

-5%

0%

5%

10%

15%

20%

25%

30%

Jan. - Jun. 11'

Food Price

Housing Price

Nominal Wage

ʭʩhʥ́ʤʭʩyʩʧʮʤʬʥʮʬʷʹ ʮʡʲ ʶʥʮʮʤy ʫ́ ʤ̋ ʥʧʺ ʴ ʺ ʤCumulative change rates compared to 2006 average


The Food Prices

0%

25%

58%

24%

46%

84%

0%

4%

16% 17%20%

25%

0% 1%5%

9%12%

15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Jan. - Aug. 11'

UN Food Price Index

Food Price

CPI

ʭʩyʩʧʮʺ ʥʧʺ ʴ ʺ ʤ

Cumulative change rates compared to 2006 average


Cost of LivingNumber of Salaries Required to Buy…

34


Source: BDO, Ziv Hatf, According to an average salary.

114

9079 71

60 56 54

30

To Buy an Apartment To Buy a Car*

* Mazda 3

14.2

11.6

9

5.9 5.4 5.4 5.34.1 3.8

Indirect Tax Burden

35

6.9

10.2

16.2

17.8

USA

Japa

nSw

itzer

land

OEC

DSp

ain

Slov

ak R

ep.

Cana

daG

erm

any

Czec

h Re

p.N

orw

ayA

ustr

alia

Turk

eyIr

elan

dG

reec

eM

exic

oKo

rea

Net

herl

ands

Belg

ium

New

Zea

land

Luxe

mbo

urg

Finl

and

Ital

yU

KPo

land

Aus

tria

Port

ugal

Icel

and

Isra

elH

unga

ryFr

ance

Den

mar

kSw

eden

Percentage of GDP, 2008


OpportunitiesThreats

20122012

2012 Threats• Expected slowdown in global trade expansion rate

• High Level of commodity prices is expected

• Weak Starting point in Industrial Exports

• Wage pressures

• A slow down in Domestic demands

• Trachtenberg Committee Recommendations

• Increase in government –controlled costs

• Geopolitical instability

• Off-shoring


37

13.3%

-0.3%

3.7%

6.3%

10.8%

7.5%8.6%

7.1%

2.7%

-11.7%

13.6%

7.7%5.8%

2011 Frcst

2012 Frcst

Volume of World TradeAnnual change, trade in goods

Source: The Economist, 15/8/11

38

“Decrease of 2% in world trade = Decrease of 2% in Israeli export = Decreases of 0.4% in GDP.”

Bank of Israel, September 2011

An Expected Slowdown in World Trade

128%

135%

158%

123%

70%

133%

161%

122%

107%

130%

117%

263%

162%

0%

50%

100%

150%

200%

250% Base metals

Industrial raw metrials

Crude oil

Rubber

Global raw metrials prices - ForcastUS$ index, Cumulative rate of chnage, Since Q /0

Industrialraw metrials )IRM) is a price index of 9 hard commodities.Source:Economist, Sep. 2011

Stability on high level in raw materials prices

Industrial Export )excl. diamonds)

אגף כלכלה40

2.0%

-2.1%

2.3%

-6.5%-8.4%

-1.8%

9.6%7.6%

9.4%

-3.8%

-0.2%-0.5%

7.6%

-2.6%

-5%

ʩ̋ʩʩ́ʲ ʺʤʠʥʁʩʤ̋ ʥʧʺʴ ʺʤReal change rates, S.A, each period against previous period

*Estimated export prices.

-

- %

4% 2%

-1%

-15%

25%

-1%

-14%

13%8%

3%

-28%

19%

7%

-21%

Real changes rates, July - August 2011 compared to Q1/10, S.A

High Tech Mixed Low Tech Low TechMixed High Tech

Most of the increase in the Industrial Export derives from the High Tech sector

41

Cumulative decrease of 5% in the Industrial Export

Industrial Production

42


3.4%

0.6%

-1.1%-0.9%

-4.8%

-2.3%

1.4%

3.9%

2.9%

5.7%

-4.6%

0.4%

2.9%

-1.2%

Real change rates in industrial production, S.A, each period against previous period

-9%

-2.6

1.4%

0.0%-0.3%

-1.0%

-2.6%

-1.8%

-0.3%

0.8% 0.9%1.1%

0.0%

0.5%0.3% 0.4%

Change rates, S.A, each period against previous period

-6%(22K people)

(14.3K people)

Employees in the Industry

43


1,500 new employees

The total number of employees in industry is still lower by 2% compared to Q1/08

2,9702,829

2,1861,668

1,5591,213

1,005667

457362351

164131126119

38-48

-790-1,239

Metal ProductsElectronic Components

Control & Medical Equip.Food & Beverage

ChemicalsPlastic & Rubber

MachineryBasic Metal

ElectricWood & Furniture

Electronic CommunicationPublishing & Printing

JewelleryShoes and LeatherMining & Quarrying

PaperNon-Metallic Minerals

Transport Equip.Textiles & Wearing

ʤʩʩ́ʲ ʺ ʤʩɹʰʲ ʡʭʩʣʡʥ̡ʤ̋ ʡʶʮʡʩʥhʩ́ʤChange in the number of employees, April - July 2011 to Q3/09

Employees in the Industry by Branches

44


45

Real Wage in Industry

-2.1%-2.6% -2.7% -2.5%

-2.1% -2.0% -2.1%

0.8%

2.7%

1.2%

2.5%

-0.6% -0.7%

Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11

*Average wage per employee job

Change rates, Compared to the Parallel Period in a Previous Year

23% 26%34%

29% 30%25%

16%9% 8%

16% 18% 21% 23% 23% 20%27% 29%

34%

40% 29%33% 27%

31%

16%

11%17%

27% 24%23%

27%33%

35%30% 26%

11%

11% 20%

11% 18% 17%

18%

23%

36%

26% 25%

31%23%

25% 24%26% 27%

Q2/07Q3/07Q4/07Q1/08Q2/08Q3/08Q4/08Q1/09Q2/09Q3/09Q4/09Q1/10Q2/10Q3/10Q4/10Q1/11Q2/11

Little Difficulty Medium Difficulty Hard Difficulty

Difficulty in Recruiting Professional Employees for the Industry )Percent of Industrialists Reporting of Difficulties, Survey of Expectations in Industry)

82%

52%

42%

61%

69%66%

74%

81%75%

79%82%

52%

67%

77%83%

73% 75% 73%

Continuous Difficulty in Recruiting Professional Employees to Industry

46

An additional wage updates are expected

47


due to the Minimum Wage Update

• January 2011 3,850 NIS

• April 2011 3,890 NIS

• July 2011 4,100 NIS

• October 2012 4,300 NIS

48

Source :OECD

Minimum Wage50% 50%

48%45% 44% 43%

41%37% 37% 37% 36% 36%

Minimum WageRatio of minimum to mean wage, 2008

ʭʥʩʡʭʥʮʩhʩʮʤy ʫ́ʺ ʰʹ ʪʬʤʮʡʩ́ʣʥʧ ʤ́ ʴ ʰʬʲ ʶʥʮʮʤy ʶʥ̋ʤʮʦʥʧ ʠʫʭʩhʥ̋ʰʤy ʥ̫ʮ-OECD

Revenue of All Industries

49

2.1%

0.8% 1.0%

-1.3%-1.2%

-3.6%

-2.3%

0.2% 0.2%

3.1%3.5%

1.6%

0.3%

1.2%0.7%

0.2%

Revenue of all industries

ʤʮʢʮʥ̫

Revenue of All IndustriesReal change rates, S.A., each period against previous period

Trend line

Financial Assets Held by The Public

אגף כלכלה50

0%

6%

5%

-6%

2%

7%

14%17%

21%

19%

27%

31%28%

Financial Assets Held by The PublicCumulative Rate of Change since Jan. 2008

Industrial Production Industrial Export Employees

-6.0%-8.3%

-4.8%

7.7%

16%

1.6%3%

5%

1%

2011 Forecast

Real Annual Changes

MAI Industry Forecast for

A Slowdown in Industrial GrowthM.A.I estimates for 2011

51

53Source: Off shoring Survey, Manufacturers’ Association of Israel. July 2011.

Within 2 years 53% of

industrial companieswill have

productive activity abroad

Shifting Production Lines Abroad

Off shoring, 29%

Planning to Offshore as a partial

substitute to manufacturing in

Israel, 13%

Planning to Offshore as a full substitute to

manufacturing in Israel, 2%

Planning to Offshore in order to expand

activities, 8%

Not Planning to Offshore, 40%

No Answer, 7%

ʪʥ̋ʡʭʩʩ̋ʰʹ ʫ

ʺ ʥyʡʧʮʤʩʩ́ʲ ʺ ʤʺ ʥʬʲ ʡʥʩʤʩ

ʺ ʥʬʩ̡ʴʺ ʩhy ʶʩ

ʥʧʡʬ

אגף כלכלה

• Continuous growth in emerging markets

• Continuous increase in domestic demand

• Attractive taxation path )?)

• Fiscal discipline + bi annual budget

• Employers – employees co-operation

• No Inflationary pressures

• A Renewed Depreciation of the NIS

• Credit rating upgrade by S&P

Local

Global

2012 Opportunities

Global Growth Forecast

55

China India Japan Euro Area USA

10.3% 10.1%

4.0%

1.8%

3.0%

9.5%

7.8%

-0.5%

1.6% 1.5%

9.0%

7.5%

2.3%

1.1%1.8%

2011 est. 2012 frcst.

Source: IMF, Sep. 2011

Growth ForecastAnnual GDP growth

4%

2%

-1%

4%

1%

-1%

-4%

-10%-9%

-1%

4% 4%3% 3% 4%

2%0%

1% 1%

The development in the Tech Plus index, each period against previous period

A continuous rise in the activity of the Hi.Tech sector in the US

Factors supporting the continuation of increasing demand

• Raising wages

• Decline in unemployment rate

• Relatively Low Real interest rate

Housing CPI, Excl. housing CPI

5.2%

2.8%

3.4%

Change in Consumer Price Index, Aug. 2011 compard to Aug. 2010

58

Inflation in Israel

Expected Rate of Inflation

Source: Bank of Israel, mean of the inflation forecasts of the commercial banks and economic consultancy companies

3.0%

3.1% 3.1% 3.1% 3.1%

3.0%

2.9%

2.7%

2.3%

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11

Average inflation forecasts 12 months forward

Since June A Sharp Depreciation Compared to Main Competitors

-5%

-1%

5% 6% 6% 7%9% 10% 10% 11%

17%

Japan China Canada UK Malaysia Taiwan Euro Area

Korea Israel India Mexico

ʬʠʸ ʹ ʩʡ-ʺ ʥʩyʷʩ̡ʤ̋ ʥyʧʺ ʮʬʤʠʥʥ́ʤʡʣʧʺ ʥʧʩɹʸ ʬʥʣʤʬʥʮʩʮʥ̫ʮʤʯʩɹʩʬʧʤy ʲ ʹ ʡʩʥhʩ́ʤʤy ʠʬʺ ʥʬʥʣʢʤ̋ ʥʩhʠʥʡʩʤʡʸʷʡʡ

7/6/11 - 27/9/11 )$ = 3.712 NIS)

Main Importers to USA

Exchange rates Forecasts

Source: Jonathan Katz

-2.1%-4.9%

5.8%

2.1%

6.3%

-13.9%

6.1%

-0.1%

2011 est. 2012 frcst.

2011 est. 2012 frcst.

ʤʬʹ ʯʩɹʩʬʧʤy ʲ ʹ ʺ ʥʧʺ ʴ ʺ ʤ-ʥyʩʠʤʥChange rates, December of each year compared to the December of the previous year

3.60

5.05

5.06

NIS to USD NIS to Euro

3.79

3.815.54

3.89

4.77

S&P Credit Rating Upgrade

62


S&P mentioned that their ratings on Israel are supported by their view of its "prosperous and resilient economy, strong institutions, ongoing fiscal

consolidation, and robust external performance".

September 2011 - Standard & Poor's Ratings Services (S&P) raised its long-term foreign currency sovereign credit ratings on the State of Israel to A+ from A.

MacroeconomicMacroeconomic Forecast for 2012Forecast for 2012

Israeli Economy 2012 Forecast

64


** Bank of Israel Forecast, 22/9/2011

Real Annual Changes in GDP

2011 Est. 2012 Frcst.**

4.0%

0.8%

4.8% 5.0%

3.2%

The Israeli EconomyReal Annual Changes

Bank of Israel

forecast -4.7%

Thank you

Daphna Aviram-NitzanHead of Economic Research Department

Manufacturers' Association of Israel

[email protected] Tel. 972-3-5198806 Mobile: 972-50-7478111

Documents

October 4 th 2011 The Israeli Economy. GDP ($Billion) 218 Population (7/2011, Million) 7.8 GDP per capita ($) 28,575 Foreign Trade (% of GDP) 72% Total