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Israel's Economy Exceeds OECD Countries

Straight from the Jerusalem Boardroom #140, Jan. 25, 2010

Yoram Ettinger, Jerusalem

 

1.  London Economist (January 2010): Israel 's 2009 economic performance, in face of global meltdown, suggests impressive growth in 2010. Israel 's GDP grew in 2009 by 0.5%, compared to an average 3.5% decline in OECD countries: US – 2.5% decline, Japan – 6.5% decline, Germany – 4.9% decline, Britain – 4.7% decline, Italy – 4.8% decline, Ireland – 7.5% decline, etc.  The Economist projects a 3.7% growth for Israel 's 2010 economy and less than 7% unemployment (7.7% in 2009), compared with a 2.4% OECD growth and 8.8% OECD unemployment.  Israel 's inflation is projected to be 1.7%, compared to 3% in 2009 and OECD's inflation of 1.2% (1.3% in 2009).  

Morgan Stanley raises growth forecast for Israel to 3.7%, beyond Bank of Israel's forecast  of 3.5% (Globes, Jan. 18, 2010).    

Israel's Central Bureau of Statistics (ICBS) reported (Israel Hayom daily, Jan. 1, 2010) a 2.9% budget deficit (% of GDP), which is higher than the 0.8% of 2008, but dramatically lower than most Western economies, some of which exceeded 10%.  The ICBS also reported a 6.5BN trade balance surplus, a 75% increase in the Tel Aviv Stock Exchange and a 1.3% decline of GDP per capita, compared with a 2.2% increase in 2008.  

2.  Israel's high-tech holding its own.  The number of Israeli high-tech companies, which enticed investment, remained high (447 compared with 483 in 2008), attesting to the attraction of Israel to venture capitalists.  The volume of dollar invested decreased significantly, as a result of drying investment resourcesand lower market valuations: $1.1BN in 2009, in comparison with $2BN – 2008, $1.8BN – 2007, $1.6BN – 2006, $1.3BN – 2005, $1.5BN – 2004 and $1BN in 2003 (Ma'ariv, Jan. 19). 

3.  Microsoft expands R&D operations in Israel, adding a few scores of employees to the 600 currently employed (Globes, Jan. 6).   

4.  Merger & Acquisition of Israeli companies persist. DVTel acquired Israel 's Ioimage for $80MN in stock (Globes, Jan. 13).  DotHill acquired Israel 's Cloverleaf for $113MN (Globes, Jan. 6). 

5.  Overseas VC investment in Israel. China's $1BN Zhejiang Sanhua invested $9.5MN in Israel 's Heliofocus (Globes, Jan. 6). Europe's FilVest, which specializes in bio-med investment, led a $12MN round of private placement by Israel 's Endogen - FilVest's first investment in Israel (Globes, Jan. 11).  Oracle, Pennsylvania 's Susquehanna Growth Equity, Silicon Valley's Hyperion, Boston 's Battery Ventures and Briatain's Stage One Ventures co-led a $10MN round of private placement by Israel 's cVidia (Globes, Jan. 15).  invested $9MN in Israel 's Wisair (Globes, Jan. 12). Sequoia Capital participated in a $3MN fourth round by Israel 's SunRad (Globes, Jan. 19). Virginia Life Sciences Investments led a $3MN seoncd round of private placement by Israel 's Cupron n(Globes, Jan. 20). 

This article is also available at: http://docstalk.blogspot.com/2010/01/israels-economy-exceeds-oecd-countries.html