Moshav Margalit in Galilee
Courtesy Embassy of Israel, Washington

The two most important tools of economic policy in Israel have been the budget and foreign exchange control. Through the budget, the government can deal with all financial activities of the public sector. Defined in its broadest terms, the public sector includes the central government, local authorities, and national institutions (where the central government clearly dominates). In 1986 government and private nonprofit institutions represented about 20 percent of GDP, which was about a 20 percent increase over the public sector's importance in 1968. Similarly, the provision of government-owned housing and rental services increased by 28 percent, rising from 8.4 percent of GDP in 1968 to 11 percent in 1986. Overall, in 1986 the business sector represented 69 percent of GDP, whereas the public sector, in all of its dimensions, represented 31 percent of GDP.

Data as of December 1988