1. LOGO The Economy in Israel Ministry of Finance June 2012

2. Outline of the Deficit 2013-2020 2

3. Budget Deficit Israel and selected countries, 2011-2012 3 Source: IMF, Ministry of Finance. Germany Israel France SpainGreece United Kingdom United States

4. Simulated Outline of Debt-to-Product Ratio Based on the Deficit and Expenditure Outline 4 New outline – 3.5% average growth New outline – 4.0% average growth

5. Year 2011 - Summary 4.8%Growth 7.0%Unemployment (based on the new index*) 211.3Income from taxes (NIS billions) 3.3%Deficit (percentage of product) 74.2%Debt (percentage of product) 5 *The recent amendment of the method of the workforce survey by the Central Bureau of Statistics resulted in an upward adjustment of unemployment rates.

6. Projection for 2012 6 3.2% Growth 221 Income from taxes (NIS billions) 3.4% Deficit (percentage of product) 73.8% Debt (percentage of product)

7. Product Growth 2008-2011 7 Source: Central Bureau of Statistics.

8. Product Growth – Global Comparison 2011-2012 Source: OECD, Central Bureau of Statistics. 8 Germany China Chile Israel KoreaBrazil Australia United States France United Kingdom Japan

9. Increase in Real Investments 2008-2012 9 Between the years 2010-2011, the volume of investments grew by some 33%. Source: OECD, Central Bureau of Statistics. *The projection for 2012 is based on OECD data.

10. Increase in Real Investments, Global Comparison 2011 10 Germany China Chile Israel Korea Australia United States France United Kingdom Japan Source: OECD, Central Bureau of Statistics. China – based on IMF data.

11. Unemployment and Rate of Participation The high growth rates recorded in the economy and the reduction in transfer payments since 2003 increased the rate of participation 11 Right axis Rate of participation Left axis Unemployment rate

12. Unemployment Rate 2008-2012 12 United States Eurozone (12 countries) Israel The data for 2012 are the existing available data, and in Israel are based on the new index. Source: BLS, CBS, EUROSTAT.

13. Creation of Jobs in Israel Increase in the Number of the Employed and of Available Jobs, in Thousands 13

14. S&P Credit Rating Israel and Western Europe, 2010-2012 Change in ratingCurrent ratingCountry AA+Austria BBB+Italy 4X BBB+Ireland AABelgium = AAAUnited Kingdom = AAAGermany = AAAThe Netherlands 12X CCGreece A+A+Israel BBB+Spain 5X BBPortugal AA+France = AAASweden 14 *An arrow represents the rise or decline of the rating by one level.

15. Real Rate of Product Growth 1970-2011 15 *Includes an updated projection for 2012 at the rate of 3.2%.

16. 16 Average growth 3.6% *Updated projection. Real Rate of Product Growth 2002-2012

17. Share of the Workforce* in the Population 2009-2029 17 *Population of ages 15-65. Source: Demographic projections of CBS, analyses by Economics and Research Division.