Business Monitor International


Israel Business Forecast Report

Published 24 September 2014 | Quarterly

  • 53 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Israel Business Forecast Report

Core Views

  • Political risks remain elevated despite a Egypt-brokered truce between Israel and Islamist group Hamas on August 26, which will result in the end of the Israeli military 'Operation Protective Edge' in the Gaza Strip. Moreover, spill over effects from the civil war in neighbouring Syria remain high.

Major Forecast Changes

  •  We have revised down our 2014 real GDP growth forecast for Israel to 2.5%, from 3.2% previously due to the recent conflict with Hamas. We project the economy expanding by 3.6% in 2015 - the result of low base effects and accelerating export growth.

Key Risks To Outlook

  • House prices in Israel have risen rapidly in recent years, raising concerns that a bubble has formed in the property market. However, macro prudential measures on the part of the government designed to bring down prices have seen a partial cooling of the market, and we do not expect a sharp decrease in prices at this stage.

  • A sharper-than-expected downturn in the global economy would hit Israel's economy badly. Exports have already been hit by stagnant demand in Europe and the US, and lower-than-expected growth in those markets would see the outlook for exports deteriorating even further.

Macroeconomic Forecasts (Israel 2012-2015)
Indicator 2012 2013e 2014f 2015f
Nominal GDP, USDbn 241.2 270.1 293.3 312.1
Real GDP growth, % y-o-y 3.4 3.3 2.5 3.6
Consumer price inflation, % y-o-y, eop 1.6 1.8 1.2 1.6
Exchange rate ILS/USD, eop 3.73 3.47 3.47 3.42
Budget balance, % of GDP -4.3 -3.5 -3.7 -3.5
Current account balance, % of GDP 0.4 1.3 2.4 3.4
e/f = BMI estimate/forecast. Source: National Sources, UN, BMI

Click here to explore data

Table of Contents

Executive Summary
5
Core Views
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Violence To Resurface Despite Truce
8
TABLE: Political Overview
8
Long-Term Political Outlook
9
TABLE: Terms Of Ceasefire
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Growth To Accelerate In 2015
14
TABLE: Economic Activity
14
Fiscal Policy
15
Gaza War Increasing Budget Strains
15
TABLE: Fiscal Policy
16
Monetary Policy
16
Dovish Monetary Policy To End In 2015
16
TABLE: Monetary Policy
17
Exchange Rate Policy
17
ILS: Losses To Be Reversed
17
TABLE: BMI Israel Currency Forecast
18
TABLE: Exchange Rate
18
Banking Sector
19
Profitability Improving In 2015
19
Regional Investment Climate
20
MENA FDI: Outperformers And Laggards
20
Chapter 3: 10-Year Forecast
25
The Israeli Economy To 2023
25
Encouraging Growth Prospects Over The Coming Decade
25
TABLE: Long-Term Macroeconomic Forecasts
25
Chapter 4: Business Environment
27
SWOT Analysis
27
BMI Business Environment Risk Ratings
27
Business Environment Outlook
28
Institutions
28
TABLE: BMI BUSINES AND OPERATION RISK RATINGS
28
TABLE: BMI LEGAL FRAMEWORK RATING
29
Infrastructure
30
Market Orientation
31
TABLE: LABOUR FORCE QUALITY
31
TABLE: MENA - ANUAL FDI INFLOWS
32
TABLE: TRADE AND INVESTMENT RATINGS
33
Operational Risk
34
Chapter 5: Key Sectors
35
Pharmaceuticals & Health
35
TABLE: Pharmaceutical Sales, Historical Data And Forecasts
36
TABLE: Healthcare Expenditure Trends, Historical Data And Forecasts
37
TABLE: Government Healthcare Expenditure Trends, Historical Data And Forecasts
37
TABLE: Private Healthcare Expenditure Trends, Historical Data And Forecasts
37
Real Estate
38
TABLE: Forecast Office Rents Costs , 2014-2015 (USD/sq m/month )
40
TABLE: Short -Term Forecast Office Net Yields , 2014-2015 (%)
40
TABLE: Long -Term Forecast Office Net Yields , 2011-2018 (%)
40
TABLE: Forecast Retail Rental Costs , 2014-2015, (USD/sq m/month )
40
TABLE: Short -Term Forecast Retail Net Yields , 2014-2015 (%)
40
TABLE: Long -Term Forecast Retail Net Yields , 2011-2018 (%)
41
TABLE: Forecast Industrial Rental Costs , 2014-2015 (USD/sq m/month )
41
TABLE: Short -Term Forecast Industrial Net Yields , 2014-2015 (%)
41
TABLE: Forecast Net Yields , 2011-2018 (%)
41
Other Key Sectors
43
TaBLE: Oil and Gas Sector Key Indicators
43
TABLE: Telecoms Sector Key Indicators
43
table: Defence and Security Sector Key Indicators
43
TABLE: Infrastructure Sector Key Indicators
44
TABLE: Food and Drink Sector Key Indicators
44
TABLE: Autos Sector Key Indicators
44
TABLE: Freight Key Indicators
44
Chapter 6: BMI Global Assumptions
45
Global Outlook
45
Eurozone Downgrade On Poor Q214
45
Table: Global Assumptions
45
Table: Developed States, Real GDP GrowtH, %
46
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
46
Table: Emerging Markets, Real GDP Growth, %
47

The Israel Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Israel and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Israel's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Israel's economic and industry growth through end-2018.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Israel's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Israel, including currency volatility, the commodity price boom and protectionist policies.

The Israel Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Israel economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Israel through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Israel Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2018 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Israel and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Israel, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Israel over the next 5-years?

BMI's Israel country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Israel Market - Political Strengths, Weaknesses, Opportunities and Threats facing Israel.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Israel's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Israel's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Israel, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Israel's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Israel will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Israel's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2009-2013, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2014-2018, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

secure
Benefit from discounts when you add multiple products to your basket
2 Products SAVE 10%
3 Products SAVE 15%
4 Products SAVE 20%
5 Products SAVE 25%
6 Products SAVE 30%
7 - 20 Products SAVE 35%
21 Products or more SAVE 40%

Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express