RT @FinanceIsrael: Exports to Europe Rise While Exports to the US Fall

August 8, 2011
…That Euro BDS crap doesn’t seem to work…

Exports from Israel to the United States declined by 9% in the period of May-June, reaching a level of $2 billion. The figures are 7% lower than they were in the same period of 2010, Globes cited from a new Israel Export and International Cooperation Institute report. They made up 26% of Israel’s overall exports, whereas exports to the US comprised 30% of Israeli exports in the same period during 2010. There was a 12% reduction in chemical exports to the US, and machinery and equipment shipments dropped by 5% as compared to 2010. “The export figures to the US are worrying, and again demonstrate a slowdown in global economic recovery, alongside erosion in the exchange rate, are also affecting Israeli exports,” Globes quoted of Export Institute CEO Avi Hefetz. Meanwhile, the country’s exports to Europe rose in May and June by 10% as compared with the preceding two months; the exports reached $2.8 billion and made up 36% of overall exports. The exports to Germany in particular rose by 11%, totaling $337 million. via export-hub.com

Israel has a technologically advanced market economy. It depends on imports of crude oil, grains, raw materials, and military equipment. Despite limited natural resources, Israel has intensively developed its agricultural and industrial sectors over the past 20 years. Cut diamonds, high-technology equipment, and agricultural products (fruits and vegetables) are the leading exports. Israel usually posts sizable trade deficits, which are covered by large transfer payments from abroad and by foreign loans. Roughly half of the government’s external debt is owed to the US, its major source of economic and military aid. Israel’s GDP, after contracting slightly in 2001 and 2002 due to the Palestinian conflict and troubles in the high-technology sector, grew about 5% per year from 2004-07. The global financial crisis of 2008-09 spurred a brief recession in Israel, but the country entered the crisis with solid fundamentals – following years of prudent fiscal policy and a series of liberalizing reforms – and a resilient banking sector, and the economy has shown signs of an early recovery. Following GDP growth of 4% in 2008, Israel’s GDP slipped to 0.2% in 2009, but reached 3.4% in 2010, as exports rebounded. The global economic downturn affected Israel’s economy primarily through reduced demand for Israel’s exports in the United States and EU, Israel’s top trading partners. Exports of goods and services account for about 40% of the country’s GDP. The Israeli Government responded to the recession by implementing a modest fiscal stimulus package and an aggressive expansionary monetary policy – including cutting interest rates to record lows, purchasing government bonds, and intervening in the foreign currency market. The Bank of Israel began raising interest rates in the summer of 2009 when inflation rose above the upper end of the Bank’s target and the economy began to show signs of recovery.