Israel Export Institute: Export growth seen slowing to 6.5% in 2011

Exports, which account for some 45% of the country's economic activity, dropped nearly 10% in the third quarter after sharp growth in the prior four quarters
 
In a forecast published last Monday by Israel's Export and International Cooperation Institute (IEI) the Export Institute CEO, Avi Hefetz, said that total exports of goods and services expected to reach US$80 billion in 2010 and reach US$85 billion in 2011.
 
Export growth is expected to slow down to 6.5% in 2011 from a 16% rise in 2010. Hefetz  noted that "Israeli exporters are dealing with lower growth in traditional export markets that comprise about 60% of Israeli exports, a slowdown in global trade and a decline in the rates of growth of imports in countries with which Israel trades," He added that the continued strengthening of the shekel was also hurting exporters since a strong local currency erodes the income and hurts profits of exporters.
 
Exports, which account for some 45% of the country's economic activity, dropped nearly 10% in the third quarter after sharp growth in the prior four quarters.
 
The decline was mainly due to weakness in the US and European economies – which together make up more than 60% of total exports. Israel's economy is forecast to grow 4% in 2010 and at a slightly slower pace in 2011.
 
The IEI projects that Israel's exports of goods excluding diamonds in 2011 will total come US$44.4 billion, a dollar increase of 6.4% compared to 2010 that represents a 5.5% increase in volume. Diamond exports are expected to increase by some 7% to US$9.5 billion, and exports of goods including diamonds are projected to total about US$50.7 billion – an increase of 6.5%.
 
Exports of services are expected to total US$26.6 billion in 2011, a 7% increase over 2010, and the combined export of goods and services for 2011 is projected to reach US$85 billion – a value increase of 6.5% compared to 2010.
 

Israel's government is encouraging exporters to expand sales to fast-growing markets in Asia and Latin America. In 2010, the United States remained Israel's largest trading partner, with exports of US$11.6 billion excluding diamonds. Britain was No. 2 – up from No. 4 in 2009 – at US$2.1 billion. China jumped to No. 5 from No. 10 with exports of US$1.7 billion.