Israel's trade deficit widens with global financial crisis

Israel's deficit averaged $US1.2b a month in January-September 2008. The export of goods grew by an annualized 2.4% in July-September
 
The Central Bureau of Statistics (CBS) announced last week Israel's trade figures for September 2008. The world wide economic crisis is, according to the CBS, beginning to affect Israel's foreign trade and the September trade figures draw a bleak picture.
 
According to the CBS both domestic and foreign demand are falling, reducing the growth rate of both exports and imports. Export growth is falling faster than import growth, causing the balance of trade to widen.
 
Israel's trade deficit averaged $US1.2b a month in January-September 2008, amounting to nearly $14b on a seasonally adjusted basis. Israel's trade deficit totaled $10.7b in 2007. Based on September alone, assuming current trends persist, Israel's trade deficit will exceed $18b on an annual basis, putting the 2008 trade deficit 80% higher than in 2007. The recession in the US and Europe, which account for two-thirds of Israel's exports, has reduced the growth in Israel's exports. At the same time, as the global recession spreads to Israel, imports are falling in line with the contraction in output and private consumption.
 
The Central Bureau of Statistics reports that the import of goods totaled $5.35b in September, the export of goods totaled $4.24b, and the trade deficit totaled $1.1b. The export of goods, excluding diamonds, grew by an annualized 2.4% in July-September in trend figures, after rising 14.9% in April-June. Industrial exports, 80% of total exports, rose by an annualized 2.8% in July-September in trend figures, after rising 15.8% in April-June. The drop in the growth rate of exports reflects the severe recession in Israel's target markets.