Israel pulled in the fourth highest level of foreign direct investment in relation to the size of its economy in 2013, according to an Organization for Economic Cooperation and Development study.
Foreign direct investment refers to investments in companies and production outside the realm of the stock market.
Whenever a foreign company buys an Israeli start-up, it is counted as FDI.
Though Israel brought in about 4 percent of GDP in FDI (around $11.8 billion) it fell significantly short of the three countries that came ahead of it. Luxembourg, in first place, brought in 39.5% of its GDP in FDI, followed by Ireland at 16.1% and Chile at 7.4%. The OECD average was just 1.4%.
The United States was the source of roughly 30% of global FDI outflows, followed by Japan, China and Russia.
For Israel, the OECD accounted for the lion’s share of FDI inflows, with almost $3b. in 2012. The lion’s share, about $1.8b., came from the United States, while about $1.1b. came from the EU.
Whether 2014 will see similarly promising levels of investment is unclear – economic growth slumped in the second quarter to a sluggish 1.7%, even before the war with Gaza took its toll. On the heels of the latest GDP figures publication on Sunday, the shekel, which had been on a stubbornly strong streak, weakened to levels not seen in five months.
More time will be needed to assess whether the currency’s weakening, which is an indicator of declining faith in Israel’s relative economic potential, will become a new trend, or simply prove a temporary hiccup.
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