The shaky security situation in Israel coupled with the global recession has led foreign investors to flee for the hills. Not only are new direct investments down: foreigners have been selling investments already made, according to data from the Bank of Israel.
Direct foreign investment plummeted to $168 million in the first half of 2002. That is a drop of 95% compared with the whole year of 2001, says the central bank.
In 2001 direct foreign investment totaled $3.1 billion, according to Bank of Israel data.
Deposits by foreign investors in Israel also reversed for the worse. In June foreign investors withdrew $407 million worth of foreign currency deposits, and another $39 million worth of shekel deposits, net.
Direct investment figures for June show that foreign investors sold $152 million worth of assets, the central bank says, mostly through withdrawals from deposits. Generally the trend since 2000 has been for foreign deposits to shrink, the central bank says.
June foreign investment in Israeli companies was $164 million, about the same as in May.