Israel's economy: 2007 performance

Straight From the Jerusalem Boardroom #121, January 04, 2008

1.  2007 Performance:

 

*International Monetary Fund Israel Report: “The performance of Israel’s economy during 2007 was exceptionally positive.” (The Marker, Dec. 11, 2007).

 

*The London Economist’s 2007 Directory: Israel’s GDP - $172BN, compared with $150BN – 2006, $132BN – 2005, $122BN – 2004, $120BN – 2003, $105BN – 2002 and $114BN – 2001. 

GDP per capita - $23,000, compared with $20,000 in 2006 and $18,680 in 2005.

 

*GDP growth – 5.3%, which is similar to the previous three years, compared with a 2.7% growth rate for the OECD.

*GDP per capita - $23,000, a 3.5% increase in 2007 (Israel’s fertility rate is the highest in the industrialized world).

*Balance of payments – first surplus ($1.4BN) since 1986.

*Unemployment – 7.4%, A 1% decrease in 2007 (The Marker, Jan. 1).

*The Tel Aviv Stock Exchange has scored a 264% (fifth consecutive year) increase since 2003, 31% in 2007 (Globes, Dec. 31, 2007).

*A 12% increase in the demand for high-tech personnel (Globes, Dec. 19).

 

*Inflation – 2.8%, compared with 4.2% in the US and 3.1% in Europe (Globes, Dec. 17).

 

*Debt/GDP ratio – 81.7%, compared with 86.7% - 2006, 96% - 2005, 100% - 2004 and 101.7% - 2003 (The Marker, Dec. 11).

 

2.  Lehman Bros.: “Israel’s economy will sustain its strength in 2008…Israel possesses the most robust fundamentals among emerging markets in Europe, Asia and the Middle East…Israel’s economy is not impacted by domestic political fluctuations…The level of confidence, by overseas investors, in Israel’s economy has increased…(Globes, Dec. 17).

 

3.  IBM acquired Israel’s start-up, XIV, for $300MN in cash (Globes, January 3, 2008). HP acquired Israel’s Noor for $117.5MN, its fourth acquisition in Israel: Mercury - $4.5BN (2006), Indigo - $720MN (2002) and Scitex - $230MN (2005) (Globes, Dec. 11).  Luxemburg’s Och Ziff acquired 28% of Israel’s Meigh Eden for 61Euros (Globes, Dec. 14). Pepsico acquired 50% of Israel’s Sabra Salads for $45MN (Globes, Dec. 11). The Newton-based Rocket Software acquired Israel’s MetManage for $44MN (The Marker, Dec. 13). Harland Financial Solutions acquired Israel’s Peldec Decision System for $30MN in cash (Globes, Dec. 31). Germany’s Software AG acquired the integrated software division of Israel’s Jacada for $26MN in cash (The Marker, Dec. 21).  

 

4.  $140MN raised by Israel’s Gemini VC for its fifth fund (Globes, Jan. 2).

 

5.  $14MN invested by the US-Israel Bi-national Industrial R&D (BIRD) Foundation in joint US-Israel ventures (Globes, Dec. 20). The initial 1979 investment in BIRD was $110MN (equally shared by the US and Israel), producing over $8BN in sales by 740 beneficiary US and Israeli companies. The Boston-based Spark Capital invested $5MN in Israel’s 5MIN (The Marker, Jan. 3).

 

6.  Switzerland’s Fering Pharmaceuticals established a $2.7MN R&D center (Globes, Dec. 11).