Finance Minister Yuval Steinitz at a meeting of th.
(photo credit: Ariel Jerozolimski)
Finance Minister Yuval Steinitz met with Israel
Manufacturers Association President Shraga Brosh on Friday to discuss
alternative ways to stem the steep fall of the shekel-dollar exchange
rate that is hurting exporters.
At the meeting, Steinitz said exports were a
major growth catalyst poised to help the country's economy emerge out
of the crisis. He said he would convene an emergency meeting at the
Finance Ministry to examine alternative solutions to assist exporters
and strengthen the competitiveness of the economy.
"Last year's fall of the dollar has cost Israeli industry
millions of shekels," Brosh said. "I am convinced that the new
government and the finance minister are well aware of the repercussions
of a return to the shekel-dollar exchange rate of NIS 3.5 seen last
year and will do everything to strengthen Israel's
Last week, the shekel-dollar exchange rate slid to its lowest
this year, breaking the NIS 3.80 barrier on rising expectations the
Bank of Israel
will halt its dollar-purchase program and will be among
the first banks to hike interest rates.
Since the second quarter of 2008, industrial exports
have dropped by an accumulative rate of 18 percent in real terms, while
during the same period the industrial sector laid off 20,000 people,
5.5% of its workforce.
In a quarterly report published Sunday, figures by the Israel
Manufacturers Association showed that industrial exports rose by a
moderate 0.5% in real terms in the second quarter of the year, led by a
sharp increase in electronics exports.
"Intel Israel and exports of electrical
components lifted export data, but the majority of industrial exports
are still in decline," said Ruby Ginel, deputy director of the
association's economics and regulation division. "In the second quarter
of this year, industrial exports grew by a moderate 0.5% in real terms,
to $8.4 billion, in comparison with the first quarter."
Trend figures published by the Central Bureau of Statistics at
the end of last month showed that exports of goods, not including
diamonds, rose by an annualized 1.2% in the months April to June, after
declining at an annualized rate of 23.9% in the months January to
Ginel said the modest increase in exports in the second quarter
was led the 11% rise in hi-tech exports, which was driven by a sharp
jump of 66% in exports of electrical components and the start of
operations of the new Intel plant in Kiryat Gat. Not including exports
of the electronics-component sector, industrial exports dropped 4% in
real terms in the second quarter of the year.
"Despite the moderate rise in exports in the second quarter of
this year, the industry has lost more than $6 billion in export volume
since the beginning of the crisis in September 2008 until June 2009,"
Sector-by-sector analysis of the quarterly report showed that
in the mixed-hi-tech sector, which includes, chemicals, machinery and
equipment, exports plunged 5% in real terms, led by a sharp drop of 20%
in real terms in the chemicals sector. From the beginning of the year,
exports within the mixed-hi-tech sector fell at a accumulative rate of