Netanyahu and Chinese Foreign Minister Wang Yi 370.
(photo credit: Pool/Noam Moskowitz)
The Asian region will overtake the US as Israel’s second biggest export destination this year, the Economy Ministry said.
The region is expected to come in as Israel’s second-largest trade partner for 2014 behind the European Union, shifting the United States into third place, according to the ministry’s Foreign Trade Authority. In 2013, exports to Asia nearly equaled those to the US for the first time, coming within 0.6 percentage points as a share of total exports.
When countries are not clustered into regional groups, however, the United States remains Israel’s largest single trade partner.
The ministry expects exports to Asia to grow from 21 percent of total exports in 2013, to 24.5% in 2018, while combined exports to the EU and US will shrink from a 63% share to 59.9%.
Exports to all other countries amounted to 16% in 2013, and are projected to fall to 15.5% by 2018.
A decade ago, Asia accounted for just 15% of Israeli exports, while the US provided more than a third of the market, Foreign Trade Authority director- general Ohad Cohen said.
Economy Minister Naftali Bennett highlighted the ministry’s attempt to bolster exports to Asia, such as focusing more commercial attachés on the region and taking steps toward free-trade agreements with China and India. Prime Minister Binyamin Netanyahu has cited developing markets in Asia as a growth engine for Israel.
While the ministry emphasized the increasing importance of the Asian market and the persistent growth of Israel’s exports since the 2008 global financial crisis, it scaled back its expectations for overall export growth for 2014.
“The export forecast for 2014 is lower than the previous forecast, and stands at 4.2% as a result of disappointing growth and expected demand from India and Brazil, and the expected stagnation in demand from countries such as Canada, Turkey and Holland,” said Cohen.
For Asia, the ministry revised expected growth from 8.5% down to 4.7%. Despite the reduction, growth in exports to Asia is still expected to outpace those to the United States (1.3%) and Europe (1.5%).
According to figures from the Foreign Trade Authority, industrial exports to Asia will grow 1.9% in 2014 and rebound to 4.2% in 2015.
The ministry’s projections were based on import data from 20 countries, a survey of 75% of Israel’s export market and macroeconomic data collected from international bodies such as the World Trade Organization and the World Bank.