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Following World War II, Britain withdrew from its mandate of Palestine, and the UN proposed partitioning the area into Arab and Jewish states, an arrangement rejected by the Arabs. Nonetheless, an Israeli state was declared in 1948, and Israel subsequently defeated the Arab armies in a series of wars that did not end deep tensions between the two sides. (The territories Israel has occupied since the 1967 war are not included in the Israel country profile, unless otherwise noted.) On 25 April 1982, Israel withdrew from the Sinai Peninsula pursuant to the 1979 Israel-Egypt Peace Treaty. In keeping with the framework established at the Madrid Conference in October 1991, Israel conducted bilateral negotiations with Palestinian representatives and Syria to achieve a permanent settlement with each. Israel and Palestinian officials on 13 September 1993 signed a Declaration of Principles (also known as the "Oslo Accords"), enshrining the idea of a two-state solution to their conflict and guiding an interim period of Palestinian self-rule. The parties achieved six additional significant interim agreements between 1994 and 1999 aimed at creating the conditions for a two-state solution, but most were never fully realized. Outstanding territorial and other disputes with Jordan were resolved in the 26 October 1994 Israel-Jordan Peace Treaty.

Location

Middle East, bordering the Mediterranean Sea, between Egypt and Lebanon

Natural Resources

timber, potash, copper ore, natural gas, phosphate rock, magnesium bromide, clays, sand

Population - distribution

population concentrated in and around Tel-Aviv, as well as around the Sea of Galilee; the south remains sparsely populated with the exception of the shore of the Gulf of Aqaba

7353985
Hebrew (official), Arabic (used officially for Arab minority), English (most commonly used foreign language)
Tel Aviv-Yafo 3.608 million; Haifa 1.097 million; JERUSALEM (proclaimed capital) 839,000 (2015)
Conventional long form
State of Israel
Conventional short form
Israel
Local long form
Medinat Yisra'el
Local short form
Yisra'el
parliamentary democracy
Name
Jerusalem
Geographic coordinates
31 46 N, 35 14 E
Time difference
UTC+2 (7 hours ahead of Washington, DC, during Standard Time)
Daylight saving time
+1hr, Friday before the last Sunday in March; ends the last Sunday in October
has not submitted an ICJ jurisdiction declaration; withdrew acceptance of International Criminal Court jurisdiction in 2002
Israel has a technologically advanced free market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among its leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are offset by tourism and other service exports, as well as significant foreign investment inflows.
Inflation
-0.545%
Total tax rate (% of commercial profits)
28.1%
Real Interest Rate
2.354%
Manufacturing, value added (% of GDP)
None%
Current Account Balance
US$ 12,260,100,000
Labor Force, Total
3,933,130
Employment in Agriculture
1.01%
Employment in Industry
17.29%
Employment in Services
79.78%
Unemployment Rate
5.61%
Imports of goods and services
US$ 87,739,155,340
Exports of goods and services
US$ 95,028,641,358
Total Merchandise Trade
40.47%
FDI, net inflows
US$ 12,323,700,000
Commercial Service Exports
US$ 39,232,600,000
citrus, vegetables, cotton; beef, poultry, dairy products
high-technology products (including aviation, communications, computer-aided design and manufactures, medical electronics, fiber optics), wood and paper products, potash and phosphates, food, beverages, and tobacco, caustic soda, cement, pharmaceuticals, construction, metal products, chemical products, plastics, cut diamonds, textiles, footwear
Commodities
machinery and equipment, software, cut diamonds, agricultural products, chemicals, textiles and apparel
Partners
US 27.5%, Hong Kong 8%, UK 6.1%, China 4.9% (2015)
Commodities
raw materials, military equipment, investment goods, rough diamonds, fuels, grain, consumer goods
Partners
US 13%, China 9.3%, Switzerland 7.1%, Germany 6.1%, Belgium 5.3%, Italy 4% (2015)
Country Risk Rating
A2
The political and economic situation is good. A basically stable and efficient business environment nonetheless leaves room for improvement. Corporate default probability is low on average.
Business Climate Rating
A2
The business environment is good. When available, corporate financial information is reliable. Debt collection is reasonably efficient. Institutions generally perform efficiently. Intercompany transactions usually run smoothly in the relatively stable environment rated A2.
  • Industry dominated by high-tech products
  • Highly skilled workforce
  • Political and financial support from the U.S. and the diaspora
  • Natural gas production since mid-2013 from large offshore reserves
  • Political fragmentation and weak coalition governments
  • Stalemate in Israeli-Palestinian negotiations persists
  • Relatively high public debt

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