Israel’s unemployment rate
as of June 2018
Israel’s inflation rate in June 2018
Israel’s annualized GDP growth rate
as of the first quarter of 2018
Steven Wyble is online content editor at Scotsman Guide Media.
Reach him at (800) 297-6061 or firstname.lastname@example.org.
Although the Jewish people have deep historical roots in the Middle East, Israel was
formally declared a modern nation-state only after Britain withdrew from Palestine
in 1948. The country subsequently fought a number of wars to secure its place in
its ancient homeland. Israel does not have the only claim to the land, however,
and although its high-tech industry has elevated the economy, conflicts with the
neighboring Palestinian population persist.
Israel’s gross domestic product (GDP) growth, which had averaged nearly 5 percent
between 2004 and 2013, slowed to an average of 2.8 percent between 2014-2017,
according to the CIA World Factbook. The agency attributes the economic slowdown
to decreased investment in the country resulting from its security challenges.
In the first three months of 2018, Israel’s economy grew at an annualized rate of
4. 5 percent, the same growth rate the country saw in the last quarter of 2017,
according to Newsweek. In June 2018, Prime Minister Benjamin Netanyahu announced
that the country’s per capita GDP had risen to $42, 115, ahead of Japan and just behind
the United Kingdom.
The country’s Finance Ministry announced this past July that Israel’s economy
appeared to have slowed in the second quarter of 2018, however. The ministry
anticipated weak growth rates and warned that a global trade war could harm
Israel’s economy, according to Reuters. The ministry forecasts 3. 5 percent GDP
growth in 2018, while the Bank of Israel projects 3. 7 percent growth.
Israel is home to a vibrant high-tech sector and is regarded as a startup hotbed.
Some $5.24 billion was invested in Israeli startups last year, up 9 percent from the year
prior, according to Newsweek. The tech sector is so hot, in fact, that the industry is
grappling with a significant labor shortage that could stymie further economic growth.
Despite the success of Israel’s high-tech industry, the country still struggles with
income inequality and poverty. Income inequality based on disposable income rose
during the 2000s. Inequality has declined in recent years, but remains among the
highest in advanced economies, according to the International Monetary Fund (IMF).
Additionally, poverty is rising, particularly among the country’s Arab and ultra-orthodox
Jewish Haredi populations. According to the IMF, the country suffers from low labor
productivity, with overall productivity rising by only three-quarters of a percent annually
in recent decades.
The country’s infrastructure is lacking: Cross-country benchmarks indicate that the
country has a public infrastructure gap of around 35 percent to 40 percent of GDP.
Public-transportation infrastructure in major cities is particularly inadequate for the
needs of the country’s growing population, and congestion is expected to worsen,
the IMF states. The Israeli government reportedly has a strategy to fund infrastructure
projects through 2030. n
By Steven Wyble