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Israel: Staff Report For The 2012 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund
Published Date:
April 2012
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FUND RELATIONS

(As of February 29, 2012)

Membership Status: Israel became a member of the Fund on July 12, 1954.1

General Resources Account:

SDR MillionPercent Quota
Quota1,061.10100.00
Fund holdings of currency735.5769.32
Reserve position in Fund325.5330.68

SDR Percent

SDR MillionsPercent Allocation
Net cumulative allocations883.39100.00
Holdings827.0093.62

Outstanding Purchases and Loans: None

Financial Arrangements: None

Projected Payments to Fund (SDR Million):

Forthcoming
20122013201420152016
Principal
Charges/Interest0.080.100.100.100.10
Total0.080.100.100.100.10

Implementation of HIPC Initiative: Not applicable

Safeguards Assessments: Not applicable

Exchange Rate Arrangement:

The exchange rate arrangement (de jure and de facto) is classified as “free floating,” as the authorities have not made discretionary interventions since August 2011.

Israel accepted the obligations of Article VIII, Sections 2, 3, and 4 on September 21, 1993. Israel maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions, with the exception of measures introduced for security reasons pursuant to Decision No. 144-(52/51). Israel subscribes to the SDDS and is in full observance of the SDDS’s prescriptions for data coverage, periodicity and timeliness, and for the dissemination of advance release calendars

Article IV Consultation:

The last Article IV consultation was concluded on January 24, 2011. Israel is on the standard 12-month consultation cycle.

ROSCs:

  • Financial System Stability Assessment was conducted in 2000, issued in August 2001.

  • Fiscal Transparency ROSC was conducted in 2003, issued in April 2004.

  • Monetary and Financial Policy Transparency was conducted in 2003, issued as IMF Country Report No. 03/76 in March 2003.

  • AML/CFT ROSC was conducted in 2003, issued in June 2005.

  • Data Module ROSC was conducted in 2005, and issued as IMF Country Report No. 06/125 in March 2006.

  • Financial System Stability Assessment Update was conducted in 2011.

Technical Assistance:

The Fund has been providing policy advice and technical assistance to the Palestinian Authority (PA) since the 1993 Oslo Accords, and presently has a senior resident representative based in Jerusalem. The Fund’s work in the West Bank and Gaza (WBG) has intensified since 2007, with a focus on the macroeconomic, fiscal, and financial areas. Staff missions to the WBG have been assisting the PA in the design and implementation of its macroeconomic and fiscal framework in line with the objectives set out in the Palestinian Reform and Development Plan (PRDP) presented at the Paris international donors’ conference in December 2007. The most recent progress report on that framework was presented at the Ad-Hoc Liaison Committee (AHLC) meeting of donors held in New York on September 22, 2009. Technical assistance has also been stepped up since 2007, in particular in the areas of public expenditure management, banking supervision and regulation, and macroeconomic statistics.

Resident Representative:

A resident representative has been in the WBG since early 1996.

STATISTICAL ISSUES

(As of February 29, 2012)

I. Assessment of Data Adequacy for Surveillance
General: Macroeconomic statistics are of generally high quality and broadly adequate for surveillance, although there are few shortcomings particularly in monetary and government finance statistics. A Report on the Observance of Standards and Codes—Data Module, a Detailed Assessments Using the Data Quality Assessment Framework (DQAF), and a Response by the Authorities were published on the IMF website on March 24, 2006 (IMF Country Report No. 06/125).
National Accounts: No issues to report.
Price statistics: No issues to report.
Government finance statistics: The methodology underlying the reported overall annual fiscal balance is not in conformity with internationally accepted best practice, as interest expenditure excludes the inflation component. The authorities are gradually moving toward implementation of the methodology that is standard in other countries, so that the discrepancy will decline over time. Quarterly data submitted by the Central Bureau of Statistics broadly follows the GFSM 2001 format. However, for financial assets and liabilities, only transaction data are currently submitted, although a financial balance sheet (stocks of financial assets and liabilities) is under preparation. Within-year monthly reports on central government operations—compiled by the MoF—cover only the main aggregates of budgetary accounts, not broken down by components.
Monetary statistics: Banking statistics are not based on balance sheet reporting, but instead on a selection of data reported by banks to the regulatory authorities. Current information does not permit full sectorization of the economy in the monetary statistics, and more detailed information on instruments also would be useful.
Balance of payments: Balance of payments and international investment position data are compiled on a quarterly basis and follow the fifth edition of the Balance of Payments Manual. External sector data were not examined in the Report on the Observance of Standards and Codes
II. Data Standards and Quality
Participant in the Special Data Dissemination System (SDDS) since April 1996, and in full observance of the SDDS’s prescriptions for data coverage, periodicity and timeliness, and for the dissemination of advance release calendars.Data ROSC published on March 24, 2006.
III. Reporting to STA (Optional)
Data are regularly reported for publication in the Government Finance Statistics Yearbook and in the IFS.

TABLE OF COMMON INDICATORS REQUIRED FOR SURVEILLANCE

Date of latest observation (For all dates in table, please use format dd/mm/yy)Date receivedFrequency of Data7Frequency of Reporting7Frequency of Publication7Memo Items:
Data Quality – Methodological soundness8Data Quality – Accuracy and reliability9
Exchange RatesSame daySame dayD and MD and MD and M
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1Jan-127-Feb-12MMM
Reserve/Base MoneyJan-1214-Feb-12MMMLNO, LO, NO, LOO, O, O, NA, NA
Broad MoneyNov-1212-Feb-12MMM
Central Bank Balance SheetNov-1220-Dec-11MMM
Consolidated Balance Sheet of the Banking SystemQ3-201112-Dec-11QQQ
Interest Rates2Same daySame dayDDD
Consumer Price IndexJan-1215-Feb-12MMMO, O, O, OO, O, LO, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – General Government4201029-Sep-11AAAO, LO, O, LOLO, O, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3– Central GovernmentJan-129-Feb-12MMM
Stocks of Central Government and Central Government-Guaranteed Debt5Q3-201129-Dec-11QQQ
External Current Account BalanceQ3-201114-Dec-11QQQNANA
Exports and Imports of Goods and ServicesJan-1212-Feb-12MMM
GDP/GNPQ4-201116-Feb-12QQQO, O, O, LOLO, O, LO, O, LO
Gross External DebtQ3-201119-Dec-11QQQ
International Investment Position6Q3-201114-Dec-11QQQ

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary, extra budgetary, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the data ROSC for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 7, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary, extra budgetary, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the data ROSC for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 7, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

For purposes of Fund relations, the West Bank and Gaza (WBG) fall under Israeli jurisdiction in accordance with Article XXXI, Section 2(g) of the Articles of Agreement.

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