Zim cargo ship.
(photo credit: REUTERS)
Exports fell just 5 percent during July and August, the Israel Export Institute said on Tuesday, a moderate figure given that Operation Protective Edge raged for seven weeks through the two-month span.
Most of the decline in exports, which totaled NIS 7.3 billion for the two-month period, came from pharmaceuticals (19% drop), electronic components (15% drop), and chemicals (5% drop) – three major export sectors dominated by just a handful of large companies.
Changes in those companies’ exports can affect the figures, and when they were factored out, the overall trend was neutral.
“Despite the slowdown in production from factories in the South during the operation, there was no [significant] drop in overall exports, and it maintained the trend characteristic for the past two years,” said Ramzi Gabai, the institute’s chairman.
Meanwhile, the Central Bureau of Statistics revised its growth rate for the second quarter – before Protective Edge began – downward, from the already anemic 1.7% it had previously calculated to 1.5%.
The barrage of rockets from Gaza during the operation knocked tourism down by nearly a third and slowed business activity, particularly in the South, and is expected to have further consequences for the economy in the third quarter.
The fact that the economy was already moderating before the war was one reason that Bank of Israel dropped interest rates to a record low of .25% for September, which will help spur growth.
Finance Ministry chief economist Yoel Naveh, however, predicts that the economy will still grow by 2.9% this year and 3% in 2015, according to Globes