Israel has created healthy economic conditions over the
past ten years because of technological advancement and high investment in research
and development. Though it has different cultures and political instability, the
Israeli economy has still flourished and persisted as an OECD high-income country
and boost their economic growth. The country also remained unhurt and
positively overcame the global financial crisis in 2009 with its economy
strongly integrated with the international economy.
$318.74 billion (2016)
goods and services
28.2% of GDP
goods and services
30.3% of GDP
below poverty line
22% ( $7.30 per person per
force by occupation
ISO,ITUC, CLS, OECD, UN Economic Bodies, WCO,
Corporate tax rate: 25%
Sales tax rate: 17%
By looking at the above table we can see that Israel’s GDP is
$318.74 billion in 2016. The GDP value of Israel is equivalent around 0.39% of
the world economy. Their annually GDP growth rate is 3%. But Israel is already in
the position of very high developed country in the world so their growth rate
is quite law. Amongst all
the 187 nations of the UN’s Human Development Index, Israel’s rank is 19th
in category of “Very Highly Developed Country” in 2016. Their inflation rate is
only 0.3% annually.
Israel has been ranked as 33rd freest economy. Their Imports
of goods and services consist of 28.2% of the GDP while their Exports of goods
and services consist of 30.3% of GDP. Israel has been part of many trade
organizations like OECD, WTO, etc. The strength of the Israeli economy was
formally recognized when Israel became a member of OEDC (Organization for
Economic Co-operation and Development) in May 2010. Israel is the only country
who has free trade agreements with both the European Union and NAFTA (United
States, Canada and Mexico).
Its unemployment rate is only 4.3% and only 22% of their population
is below the poverty line which means they are not able to earn $7.30 per day. Even
their occupational structure is highly service oriented, only 1% of the labour
force is engaged in agriculture sector and 17.6% is in industrial sector while
about 81% of the labour force is worked in service sectors. So these are the
reasons behind the high development of Israel.
Ø EXTERNAL TRADE
Israel has poor natural recourses, so that it imports
the petroleum, coal, food, uncut diamonds, other production inputs, and
military equipment. The main imports partners are US, China, Switzerland,
Germany and Belgium.
Israel’s major exports are machinery and equipment, software,
agricultural products, cut diamonds, chemicals, textiles and apparel. Israel’s
exports, around half, manufactured goods involve advanced technology systems
but Israel’s traditional mid-tech and low-tech industries are remaining strong.
Main export partners are United States, Hong Kong, U.K, China, Belgium, India
Being free and open trade helped Israel’s economy to
boost up. They also improved the management of government spending, trade
freedom, labour freedom and fiscal freedom. It will help Israel to remove
poverty, enhance economic prosperity, capitalize more trading opportunities and
develop the societal as well as democratic progress.