Superficially, it does not look too promising for Israel’s financial planners. The trade deficit widened significantly in August, and the European markets are not looking to increase their imports at the moment. The Tel Aviv stock exchange has lost 25% of its value since January, currently at its lowest point for two years.

And yet, most of the fundamentals are still in place. For example, the banks are not being questioned as in France. Standard & Poor raised Israel’s credit rating last week. And figures released by Manpower show that 25% of companies expect to recruit additional workers in the coming quarter, with less than 10% looking to downsize.

One explanation for that positive sign may be due to the changes in the rate of exchange. The shekel, seen as a strong currency for much of the past year, has began to lose its gloss. It has lost nearly 10% of its value in almost 3 months.

The upside is that this shift will make Israeli exports more attractive and so help to encourage employment.

What next? It is evident that the hope of 4% growth for 2011 will not be met. That said, with inflation in check and a budget debt that can be financed, the Israel economy is still maintaining its positive shape.