It was certainly a banner year for the Israel economy as it continued to churn out impressive growth behind a seemingly endless strength in the shekel, and superb employment figures.
Israel Economy Snapshot
One thing certainly sad to see 2017 end is the Israeli economy, which continued to expand at a pace consistent with its potential growth. Fueled by, among other reasons, an increase in employment and real wages, and a serious budget surplus resulting from a record high in State tax revenue, it all added up to substantial increases in consumption. Although the Israel economy may have over-performed in 2017, a recent report by the Taub Center does project a slowdown in 2018, citing a decline in the share of Israel’s working-age population, along with an increase in population groups whose employment rates are relatively low due to skills not compatible with the modern labor market, however, some steps are being taken to combat this.
In currency news, while November saw the shekel named the world’s second strongest currency, and although no other currency in the world has strengthened against the US dollar over the past five years other than the shekel (which has gained 12% against the USD since 2012), not everyone is jumping on the bandwagon. In a recent assessment, Citi, now considers it to be overpriced by 10%, and has labeled it the emerging markets’ most expensive currency.
2017 Israel Business Roundup
Before 2017 fades away in the rear-view mirror, we take a look back at some of our favorite stories to have come across the wire in the land of Israel. From shekel news, to record-setting economic data, new olim, and more, here are our editorial team’s top ten picks of 2017.
A More Attractive Quality of Life?
Israel’s import industry received a makeover thanks to a sweeping cancellation of import duties by the Ministry of Finance on a consumer goods ranging from beauty products to washers and dryers. The removal of these duties is the beginning of the Ministry of Finance’s efforts to reduce the cost of living for Israelis, with the elimination of the “purchase tax” also on its short-list. Originally imposed a means of encouraging Israelis to purchase locally produced goods, the vast majority of consumer products are not made in Israel, thus rendering the purchase tax obsolete. That said, let’s hope we’ve seen the last of it in 2017.