“The Economist” predicts in its latest edition that foreign investment in Israel will rise in 2003, as part of the recovery in 25 emerging markets.
“The Economist” cites the Institute of International Finance (IIF) as predicting $139.1 billion in foreign investment in emerging markets in 2003, 25% more than in 2002, but still far below the $200 billion invested in 2000, and the $330 billion invested in the peak year of 1996.
Israel is expected to attract $5 billion in foreign investment in 2003, compared with $3.8 billion in 2002, and $11.5 billion in the peak year in 2000. Israeli start-ups attracted $2.5 billion in foreign investment and Nasdaq IPOs in that year. Israel accounts for 3.5-5.7% of total foreign investment a year in the 25 emerging markets surveyed.
Nevertheless, Israel is in last place among the 25 emerging markets in “The Economist” survey, with only 0.3% growth in the first quarter of 2003. The Czech Republic and Turkey lead the table.
“The Economist” states there are signs of recovery by developed countries in the first quarter of the year: Japan recorded 2.7% growth; the UK - 2.2%; the US - 2.1%; and France - 1%.
A breakdown of foreign investment in 2003 by region is as follows: Asia-Pacific - 48.5%, or $67.5 billion; Latin America - 24.7%, or $34.3 billion; Europe - 22.4%, or $31.2 billion; and Africa/Middle East - 4.4%, or $6.1 billion.
Israel is considered a member of the Asia-Pacific, not Africa/Middle East bloc in terms of emerging markets. The foreign investment figure for Africa/Middle East does not included pledged US and European investment for Iraq’s reconstruction.
Published by Globes [online] - www.globes.co.il - on June 9, 2003