Israel is coming to the end of the celebrations of the Jewish New Year. There are increasing signs that a general election will be called for early 2013.As opposed to many countries in the democracy club, Israelis have usually considered security issues as the key determining factor for who they choose at the polls.

However, the social and economic agenda have been paramount in the local media since early 2011. With that background, I thought it would be interesting to put down some benchmarks as the election process kicks off.

1) Credit Rating: Last week, Standard & Poor’s Ratings Services affirmed Israel’s currency at the level of AA-/A-1+. In a period of global instability, that is very encouraging. Despite recognising some short term issues, such as growing budget deficits, the long term outlook is stable if not strong. In particular, the country will begin to benefit from revenues from off-shore gas supplies.

2) Tel Aviv Stock Exchange (TASE): This week, on lower trading, TASE hit a 15 month high. “Although Israeli trading volume shrank sharply  this year, in both relative and absolute terms, its relative performance last  year and over the period since the crash of 2008/09, was better than the global  average.”

3) Foreign Currency Reserves: It is accepted that Israel currently has an unexpected budgetary gap of around 15 billion shekels – almost US$4 billion. In parallel, foreign currency reserves are close to a record high, coming in at US$76 billion. With this security, the country has little problem today raising funds on the capital markets.

4) Israeli shekel: Linked to these developments, the Israeli shekel has appreciated against the dollar in recent weeks. It is now at its best trading position since mid June 2012.

5) Economic growth: For much of the past decade, Israel has recorded annual economic growth rates of 4-5%. The forecasts for 2012 were always much lower than that and there was fear a few months back that the stat would dip towards 2.5%. The latest reports are much more optimistic, as the figure will end up towards 3.3%. Exports to the USA have held up.  The jury is still out for 2013.

It cannot be denied that many food distributors have indicated that they will be raising prices in October 2012. Unemployment is on the move upwards. Budget holes must be filled eventually. Voting intentions will not solely be decided by what is happening around the Middle East scene.

However, the above analysis indicates that Israel’s economy remains fundamentally sound. Let us hope that the politicians find a way to protect this position, even as they set about the electoral ritual of carving each other to pieces.