Increased local demand as the country experiences its fifth year of economic expansion is expected to result in 9 percent revenue growth to NIS 1.2 trillion for the country's business sectors, led by goods and services, the Federation of Israeli Chambers of Commerce said on Tuesday as it forecast a further 9.8% jump to NIS 1.3 trillion in 2008.
Revenues from goods and services are expected to rise some 7% this year and then another 11%, or NIS 82b., to NIS 830b. in 2008, after rising 6.7% in 2006 and 5.8% in 2005.
"The increases stem from changes that the markets have undergone and as a result the goods and services industries will continue to be competitive and they will continue to increase the amount of money that they generate and the number of jobs they create," said Israela Many, deputy director general of economics and taxes in the FICC.
Growth of 12% to NIS 175b. is expected in the business services industry this year, while the finance and securities sector is projected to grow 13.5% to NIS 27b.
"The growth in these sectors can be attributed to the reforms introduced into the market by the Bachar Committee," Many noted. "Bachar opened up the market to greater competition in the finance sector and it allowed for significant growth in terms of sales in all the finance-related sectors."
The capital market reforms established by the Bachar committee require the country's banks to sell their asset management businesses as a way of bringing new players into the market and reducing conflicts of interest. As a result of the reforms, said Many, some 8,500 new jobs have been created in the finance and securities sector.
Meanwhile, David Artzi, chairman of the Israel Export Institute, said between the months of January-September of this year, exports of Israeli services rose to $15.3b., approximately 10% above numbers from the same period last year. Over all of 2007, Artzi expects service-based exports to reach $21b.
"In 2006, Israel was ranked 31st in the world in terms of exporting services," Artzi said. "Part of the objective of the Export Institute this year was to raise our world standing."
Between January-September, tourism-based service exports rose 8.5% to $2.4b., transportation exports (including shipping, port rental space and various port services) grew 17% to $3.2b and exports of computer and software services also increased 17% to $3.2b.
Separately, on Tuesday, the FICC announced the appointment of Ami Lapidot as vice president of the organization and Avihu Ben Nun as chairman. Lapidot currently serves as chairman of Lapidot Pharmaceuticals, while Ben Nun is presently a director of Kardan Technologies, Bank Mizrahi and Elbit Systems.
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