Travel Reference
In-Depth Information
ISRAEL'S ECONOMIC GROWTH IN
SELECTED PERIODS, 1950-2009
Years
Average Annual Change (%)
1950 -1965
10.6
1966 -1967
1.7
1968 -1972
11.8
1973 -1977
3.6
1978 -1984
3.3
1985 -1989
3.8
1990 -1996
6.1
1997-1999
3.3
2000
8.9
2001-2003
0.4
2004 -2006
5.2
2007
5.2
2008
4.0
2009
0.7
Source: Israel Central Bureau of Statistics.
Note: Israel experienced recessions in 1966 -1967,
1997-1999, 2001-2003, and 2008 -2009, as well as a
prolonged period of slow growth in 1978 -1984.
decline. GDP growth slowed to 1.7 percent in the two years of the recession, which in per capita
terms was equal to a decline of 1.2 percent, and the unemployment rate jumped to 10 percent.
Unaccustomed to recession, the slowdown had an unusually deleterious effect on national
morale. Some Israelis chose to emigrate in search of opportunities elsewhere.
The slowdown evaporated in the aftermath of the June 1967 Six-Day War. Construction
resumed as the army built installations in the newly captured Sinai, West Bank, and Golan
Heights. The arms embargo imposed by France forced Israel to accelerate development of
its own defense industry, giving a boost to the electronic and metal sectors. The victory also
ushered in a new era of optimism, encouraging investors and immigration just as the doors of
the Soviet Union briefl y opened to Jews wanting to leave.
THE YOM KIPPUR WAR AND HYPERINFLATION
The 1973 Yom Kippur War brought the era of expansion to a halt. For more than a decade,
the economy was mired in slow growth and accelerating infl ation. The GDP expanded at an
 
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