March 2022

Israel’s Economy 2021

Economic growth in Israel has recovered rapidly in 2021.

The GDP in Israel increased by 8.1%, following 2.2% decrease in 2020 and 3.8% growth in 2019.
GDP growth was primarily impacted by higher private consumption, export of services and
investment in fixed assets.
The growth in GDP is very high compared to the rest of the world.

The broad unemployment rate (consisting of the unemployed, those employed but away
from work due to the Corona Virus outbreak, and those out of employment due to
termination or to closure of their place of employment) decreased sharply during the
year, from 18.0% in January 2021, to 6.0% in December 2021.

According to forecast by the Bank of Israel Research Division, GDP in Israel is expected
to grow by 5.5% in 2022 and 5% in 2023. The broad unemployment rate should be
at 4.8% at the end of 2022.

The Consumer Price Index increased by 2.8%, compared to a decrease by 0.7% in 2020.
The increase in CPI was moderate in Israel, compared to the rest of the world.

In 2021, the NIS was revalued by 3.3% vs. the USD. The USD/NIS exchange rate
was revalued due to a high level of foreign investments in the economy, foreign currency conversion
by institutional investors and foreign currency purchased by the Bank of Israel.

In order to support market liquidity, to provide relief in credit terms in the economy and to
support economic activity, the Bank of Israel retained the interest rate of the central bank
un-changed in 2021, at 0.1%.

The deficit rate for 2021, as percentage of GDP, was at 4.5%, compared to 11.7% in 2020 and 3.7% in 2019.

The state budget includes multiple reforms, including: extensive plan to open the economy for imports,
regulatory improvement program and more.