The following article summarizes key events and developments over the last year; communicated by the Ministry of Finance.
The Israeli economy continued to withstand the global economic crisis in 2011, while maintaining growth: Israel's GDP per-capita is forecasted to grow by 3% in 2011. Also, Israel managed to decrease its unemployment to an historic low level, standing at only 5.5% in the 2nd quarter of 2011, and 5.6% in the 3rd quarter of 2011.
Inflation in the last 12 months (Nov. 2011 compared to Nov. 2010) stands at 2.6%, within the target bandwidth of the Bank of Israel (1%-3%). Average monthly Consumer Price Index (where 2010=100) grew from 101.4 in Nov. 2010 to 104.1 in Oct. 2011.
The Bank of Israel Interest rate grew gradually from 2% in Jan. 2011 to 3.25% in June. In between June to September, Bank of Israel interest rate was stagnant, and then was gradually decreased to 2.75% in Dec. 2011.
Both imports and exports knew a recovery in the 1st half of 2011, with a decline in the 3rd quarter. Exports of goods and services are forecasted to grow by 3.8% in 2011, and imports of goods and services are forecasted to grow by 9.2% in 2011.
International reports
Israel climbed 2 ranks from the previous Global Competitiveness Report of 2010-2011, from 24th to 22nd.According to the report, Israel's main strengths remain its "world-class" capacity for innovation, derived from the presence of "the world’s best research institutions" and their collaborations with the business sector, and the high number of patents. Also, the report mentions Israel's favorable financial environment, particularly the solid availability of venture capital, which has "further contributed to making Israel an innovation powerhouse". According to the report, these elements have become stronger in the past year.
The report notes that increased budgetary discipline with a view to reducing debt levels would help the country maintain stability and support economic growth going into the future. Israel Ranked 17th in IMD World Competitiveness Yearbook 2011 Israel keeps its position as 17th in the overall ratings, as it was ranked 17th also in 2010In IMD's World Competitiveness Yearbook (WCY) in 2011, Israel is 1st in the world in total expenditures of R&D as % of GDP, entrepreneurship, central bank policy and scientific research. Also, In IMD WCY 2011 Israel is 2nd in the world in access to venture capital and public expenditure on education.
Israel's weak ratings were in immigration laws, governmental debt as a % of GDP, long term unemployment and cost of living.
Looking at Israel's overall rating in the IMD World Competitiveness Yearbook over the past decade, Israel's rating ranged between 13th and 33rd out of 60 countries.
