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THE ECONOMY
May CPI fell by 0.5% - the last time the index registered a larger drop was in May 1969, when it fell by 0.6%. The Consumer Price Index for May fell by 0.5% - the lowest index in 34 years. The last time the index registered a larger drop in May was in 1969, when it fell by 0.6%. The main reason for the drop was the sharp revaluation of the shekel, which brought about a significant reduction in the prices of products that are linked to the dollar, such as housing and foreign travel. Bank of Israel Governor, Dr. David Klein, is expect to announce 0.4% - 0.5% reduction in interest rates next week, in light of the negative indexes and following Knesset approval of the economic recovery plan, which includes large budget cuts. The June index is also expected to be negative. The index has risen only 0.1% since the beginning of the year (the first five months of 2003), compared to an increase of 4.9% in the same period last year. The annual inflation rate is expected to remain low this year, around 1%, while the inflation target set by the government for the year is 1%-3%. The Manufacturers Association reaction to the May index: the process of lowering the interest - which today stands at a very high 7% - must be accelerated. Negative indexes are also expected in the coming months.
The following economic data was published this week: Personnel - The overall demand for workers increased overall in May by 13% compared with April. This is the first reversal in the downward trend in the demand for workers registered in recent months, according to a poll by the Manpower Israel personnel. The largest increase was noted in the manufacturing, industry, and metal sectors - 37%. Traffic at Ben-Gurion Airport - The downward trend in international travel to and from Israel since the beginning of 2003 has been halted. During the first half of June, an increase of 7.5% was registered in international travel at Ben Gurion Airport, compared with June 2002. according to interim data published this week by the Airport Authority. Industrial exports - The Manufactures Association reported this week that the export by all branches of the chemicals industry grew by 11% during the first quarter of 2003 compared to the same period last year, an increase of $ 1.15 billion. The export of pharmaceuticals, for instance, grew by 25%, oil refinement by 56%, and paints by 54%. On the other hand, drops were also registered such as in minerals (34%) and fertilizer (30%).
The Israeli company Verint, which manufactures video operated interception systems, has signed a distribution agreement with the leading manufacturer of security kits in the US, Lockheed Martin, which is also one of the world's largest safety industry companies. Lockheed Martin will integrate Verint-manufactured digital systems for video recording into its products. Among other features, these systems are capable of warning against break-ins.
The Israeli company Admocs has just won a sought after contract - its first with the American communications giant AT&T, one of the world leaders in data and voice communications. AT&T specializes in local calls, international calls, and Internet services; its annual turnover is $37 billion, and it serves over 40 million private clients. Amdocs will supply AT&T will EBP (Electronic Bill Presentment) systems, which enable the electronic transmittal of bills to clients, simplifying the bill paying procedure. Admocs will earn several million dollars in this deal, but according to experts, additional deals with AT&T are expected.
The Israeli software company Panorama, which develops executive business software products (Business Intelligence), won a tender to sell executive information systems to Bulgaria's' largest cellular company, Mobiletel. The company has over 75% of Bulgaria's cellular market, with 2 million subscribers who constitute over 25% of the country's population. Panorama has already made sales in eastern Europe - in Poland the Czech Republic, Croatia, and Yugoslavia; the deal with Bulgaria is part of the company's strategic plan to expand in the Eastern European market. In 1996 Panorama sold its international Microsoft technology for $20 million.
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