Snir indicated that the first sector to take a hit from an economic slowdown in the U.S. will be Israel's active world-class high-technology sector. Demand for the Israeli technology products will be cut, he explained. Also in line to take a beating will be the financial sector, Snir added. He noted that Israeli businesses, like others the world over, will also find it harder to get credit overseas, especially in America.
"Israelis hope for many more tourists," Snir said, "but that's not clear if that's going to happen in the current crisis."
Asked about the current condition of the Israeli economy, Snir replied, "At the moment, the Israeli economy seems to be in a good position. We started the crisis being in a very good position - partly because the Israeli financial market has never really adjusted to the new market conditions, so the Israeli financial market is still way behind what happened in the U.S. and Europe. The financial sector in Israel is very old fashioned and so it isn't as exposed to what's going on in the world. In addition, the Israeli economy has enjoyed a very healthy growth in the last four or five years."
Israel's economic growth and foreign investment gives Israel some breathing room at the time of the current crisis, Snir explained. However, he added that if foreign investors begin to withdraw their funds, then Israeli companies that depend of that infusion of capital could end up facing a crisis.
Despite the relatively strong Israeli economy, Snir warned, "The recession will come, no way around it." There is nothing the government can do to stave off the blow, he commented, except in devaluing the shekel in relation to the U.S. dollar to benefit exporting firms.