Overview: Israel has a market economy with substantial government participation. It depends on imports for crude oil, food, grains, raw materials, and military equipment. Despite limited natural resources, Israel has developed its agricultural and industrial sectors on an intensive scale over the past 20 years. Industry accounts for about 23% of the labor force, agriculture for 5%, and services for most of the balance. Diamonds, high-technology machinery, and agricultural products (fruits and vegetables) are the biggest export earners. The balance of payments has traditionally been negative, but is offset by large transfer payments and foreign loans. About half of Israel's $18 billion external government debt is owed to the US, which is its major source for economic and military aid. To earn needed foreign exchange, Israel must continue to exploit high-technology niches in the international market, such as medical scanning equipment. Iraq's invasion of Kuwait on 2 August dealt a blow to Israel's economy in 1990. Higher world oil prices added an estimated $300 million to Israel's 1990 oil import bill, and helped keep the inflation rate at 18% for the year. Regional tensions and continuing acts of the Palestinian uprising (intifadah)-related violence contributed to a sharp dropoff in tourism--a key source of foreign exchange--to the lowest level since the 1973 Arab-Israeli war. In 1991, the influx of up to 400,000 Soviet immigrants will increase unemployment, intensify the country's housing crisis, and contribute to a widening budget deficit.

GNP: $46.5 billion, per capita $10,500; real growth rate 3.5% (1990 est.)

Inflation rate (consumer prices): 18% (1990)

Unemployment rate: 9.8% (March 1991)

Budget: revenues $28.7 billion; expenditures $33.0 billion, including capital expenditures of $NA (FY91)

Exports: $10.7 billion (f.o.b., 1989); commodities--polished diamonds, citrus and other fruits, textiles and clothing, processed foods, fertilizer and chemical products, military hardware, electronics; partners--US, UK, FRG, France, Belgium, Luxembourg, Italy

Imports: $14.2 billion (c.i.f., 1989 est.); commodities--military equipment, rough diamonds, oil, chemicals, machinery, iron and steel, cereals, textiles, vehicles, ships, aircraft; partners--US, FRG, UK, Switzerland, Italy, Belgium, Luxembourg

External debt: $24.5 billion, of which government debt is $18 billion (December 1990)

Industrial production: growth rate - 1.5% (1989); accounts for about 40% of GDP

Electricity: 4,392,000 kW capacity; 17,500 million kWh produced, 4,000 kWh per capita (1989)

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

Agriculture: accounts for 5% of GNP; largely self-sufficient in food production, except for bread grains; principal products--citrus and other fruits, vegetables, cotton; livestock products--beef, dairy, and poultry

Economic aid: US commitments, including Ex-Im (FY70-90), $18.2 billion; Western (non-US) countries, ODA and OOF bilateral commitments (1970-88), $2.5 billion

Currency: new Israeli shekel (plural--shekels); 1 new Israeli shekel (NIS) = 100 new agorot

Exchange rates: new Israeli shekels (NIS) per US$1--2.35 (May 1991), 2.0162 (1990), 1.9164 (1989), 1.5989 (1988), 1.5946 (1987), 1.4878 (1986), 1.1788 (1985)

Fiscal year: 1 April-31 March; changing to calender year basis starting January 1992

NOTE: The information regarding Israel on this page is re-published from the 1991 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Israel Economy 1991 information contained here. All suggestions for corrections of any errors about Israel Economy 1991 should be addressed to the CIA.