Israel become most competitive economy wordwide

Vardina Hilloo

Israel’s economy will probably expand 4.1 percent this
year, powered by exports, consumer spending and home
construction, the Central Bureau of Statistics said.

Exports, which account for about half of gross domestic
product, will climb 13.1 percent, after falling 12.5 percent
in 2009, the Jerusalem-based bureau said at a press conference
today. Consumer spending will increase 5 percent and residential
building by 11.1 percent, it said.

Israel’s rebound from the global financial crisis has been
aided by strong domestic spending and a technology industry
aimed at global businesses,
According of the lates World Competitiveness Yearbook,
Israel’s economy is Nummber 1 in the world for resilience
to economic cycles and Nummber. 17 for competitiveness.
The rankings were compiled by the Swiss Institute for
Management Development (IMD).

Israel’s ranking in the top place in terms of the economy’s
 resilience to crises is a direct result of the actions taken
 by the Finance Ministry and the Bank of Israel, who withstood
the pressure and didn’t stream money to failing organizations
and financial institutions as was the case in the US and Europe.
According to the debt-stress test, the largest “old”
industrialized nations, including Japan and the UK, will
suffer a “debt curse,” in the worst case lasting until 2084.

Currently, budget deficits are soaring as a result of the
global economic crisis, and it is estimated that the average
debt of the G-20 nations, for example, will climb from 76%
of their combined GDP in 2007 to 106% in 2010.

Israel with a current debt-to-GDP ratio of about 80%,
won’t be able to reduce its ratio to 60% until 2019,
the report said.

Israel’s economy began to recover from the global crisis in
the second quarter of last year after contracting for the
previous six months. Growth unexpectedly accelerated to an
annualized 4.7 percent in the second quarter of 2010 as
exports climbed 16 percent. Unemployment fell to 6.2 percent
in the second quarter.

Israeli high-technology exports, which make up about 50 percent
of industrial sales abroad, are mainly aimed at businesses,
which have fared better than consumers during the recession.
Pharmaceutical companies, like Teva Pharmaceutical Industries Ltd.,
are also contributing to export growth.

 Sep. 7. 2010