1. According to Standard & Poor, Fitch and Moody’s – the world’s top credit rating companies – Israel and Australia are the only two Western countries whose 2019 credit rating (reflecting economic growth) is higher than it was before the global economic meltdown of 2007/2008. Currently, Israel is rated AA- by Standard & Poor, A+ by Fitch and A1 by Moody’s.
2. According to the London Economist (November 5, 2019), despite short-term political uncertainty, Israel’s economic growth is sustained by a strong domestic consumption, an expansion of natural gas explorations, findings and export, and the continued dynamism of the hightech sector, which has attracted substantial foreign investment. For example,Intel announced its plan to invest $11BN in a new export-oriented semiconductor manufacturing facility in Israel [as a follow up to the 2016 acquisition of Israel’s Mobileye for $15.3BN and investment in scores of Israeli startups].
Israel’s economy features low unemployment (3.7%) and rising real wages. Exports are expected to rise despite the relative global economic slowdown, and independent of the continued appreciation of the Shekel (the strongest currency against the US dollar), but due to the initiation of natural gas exports.
GDP growth is expected to slow to 2.9% in 2020, before recovering to 3.8% in 2021 and 4% in 2022.
3. The NYC-based Centerbridge Partners and Greenwich, CT-based Gallatin Point Capital acquired 32.5% of Phoenix (Israel’s 2nd largest insurance group) for $450MN (Globes Business Daily, Nov. 5, 2019). Germany’s insurance giant, Munich Re, invested $250MN in Israel’s Next Digital Insurance startup, which was founded in 2016 by entrepreneurs who in 2014 sold their previous startup, Check, to the Silicon Valley-basedIntuit for $360MN (Globes, October 8). The Greenwich, CT-based General Atlantic led a $165MN investment in Israel’s Riskified, which develops software preventing fraud and verifying consumer identities (Wall Street Journal, Nov. 5). Israel has become Europe’s Silicon Valley. During the first half of 2019, German investors accounted to 30% of the number of European deals in Israel’s ecosystem, including a branch of Merck, the global pharmaceutical giant. While German investment profile is dwarfed by the USA, 60% of the leading Frankfurt Stock Exchange companies have Israeli branches, seeking Israeli technologies, surging since 2016. In 2018, German investors were 4th in the number of Israeli deals – 5% of total deals foreign investment – between the UK’s 7% and China’s 4% (Globes, August 12).