ABSTRACT
During the first half of 1990, the Israeli economy experienced a positive turn, mainly as a result of demand expansion, particularly in investments, and of continuous productivity improvements. From the economic point of view, the Gulf crisis and its immediate derivatives could be regarded as an external shock, leading to variable levels of disruption in diverse sectors and economic activities. Additional loss of foreign currency income was anticipated later in 1991, the value of which obviously depended on the tourism recovery rate in the ensuing months. Compared with the past oil price crisis in the 1970s, the overall impact on the Israeli economy was relatively moderate this time. Some of the additional resources are conditional, some probably will have to be covered by future annual grants, but a considerable part is a net increment of resources. A positive impact on economic growth could be generated by future developments in energy prices.
