illustrative-ship imports exports 311aj.
(photo credit: Ariel Jerozolimski)
Exports rose an annualized 28.8 percent in the February-April period, the
Central Bureau of Statistics reported Thursday. The rise came despite growing
concern by manufacturers that they would be hit hard by the falling dollar,
which sank to a 34-month low against the shekel at the end of the
However, the data showed the widest trade deficit in at least 16
years in April as a stronger shekel made exports less competitive in world
markets. The gap, excluding polished diamonds, ships and aircraft, widened to a
seasonally adjusted $1.6 billion from a revised $1.2b. in March, the statistics
bureau said. Imports rose 6.3% to $5.5b., while exports fell 2.1% to $3.9b., the
first decrease in four months.
The trend data calculated by the bureau,
seasonally adjusted and corrected for irregular elements, pointed to an
annualized rise in exports (excluding diamonds) of 28.8% in the quarter
beginning in February and a simultaneous rise of 25.8% in imports (excluding
diamonds, ships, aircraft and fuels).
Manufacturing exports (excluding
diamonds) constituted 84% of all export of goods, while diamond exports
accounted for 13% and agriculture for the remaining 3%.
statistics would seem to contradict recent criticism from the Manufacturers
Association of Israel and exporter groups that the dollar’s fall is hurting
them, the association says the data does not reflect the entire
“More than 70 percent of Israeli exports are fixed according to
the dollar, and there are many different explanations [for the continuing rise
in exports],” Ruby Ginel, the association’s vice president for the economy and
regulation, told The Jerusalem Post Thursday.
Israeli manufacturers were
left with large inventories after 2010 and had “no choice but to sell those
stocks, even at a loss,” he said. Another reason for April’s rise in exports, he
said, was that there is generally a lag between the fall of the dollar and its
impact on the exchange rate.
“The damage it causes to the competitiveness
[of Israeli exports] comes with a lag of around half a year,” Ginel said. “So
it’s reasonable to assume that toward the end of the year, or sometime in the
second half of 2011, we will see the impact of the exchange rate with a drop in
“There is still reason to worry,” he said. “Right now the
dollar is hovering between NIS 3.40 and NIS 3.50. We are talking about a
revaluation [of the shekel] of 26% since 2006. We are talking about a continuing
drop in the profit margins of manufacturers.”
Association says it has not received a government response since holding a press
conference last week, at which its president, Shraga Brosh, accused Finance
Minister Yuval Steinitz of not caring about the plight of exporters in light of
the falling dollar.
The dollar hit its lowest point against the shekel in
almost three years on May 1, when the Bank of Israel set the dollar-shekel
representative exchange rate at NIS 3.395. However, it has recovered gradually
since then and by early Thursday afternoon had topped NIS 3.50 for the first
time in six weeks.
The dollar should continue to rise next week toward
NIS 3.52 on the back of the drop in global commodity prices, USG Capital
analysts Eli Ben- David and Shay Zakhaim said in a report
However, they said the overall trend of the shekel
strengthening against the dollar would not disappear. They, and most other
analysts, believe Bank of Israel Governor Stanley Fischer will raise the
interest rate for June by 25 basis points to 3.25%.
“Fischer will pay
less attention to the dollar exchange rate as a measure for making interest-rate
decisions,” the USG Capital report said. “The determining factor will be
inflation, and in the event that inflation continues to rise, the interest rate
will continue to rise accordingly.”
Bloomberg contributed to this report.