Sharp drop in exports eases in second quarter

Unfavorable shekel-dollar exchange rate has manufacturers on edge.

July 27, 2009 09:34
2 minute read.
Sharp drop in exports eases in second quarter

Zim container ship 88 248. (photo credit: Ariel Jerozolimski)

The sharp fall in exports since the start of the economic crisis ended in the second quarter of this year, the Israel Export Institute reported Sunday. "In the second quarter of this year, the pace of the fall in exports slowed down compared with the first quarter of the year, mainly as a result of a rise in exports of electronic and aircraft parts," IEI chairman David Artzi said. "The slowdown in the sharp drop in exports does not mean that we can expect significant growth of exports over the coming year, since it will depend on the development in the shekel-dollar exchange rate." Artzi said Finance Minister Yuval Steinitz and Bank of Israel Governor Stanley Fischer should take all necessary steps to secure an exchange rate of at least NIS 4 to the dollar, prevent speculative activity in the foreign-currency market and continue the central bank's daily dollar-purchase program. In the first six months of the year, exports of goods dropped 34 percent in dollar terms to $21.8 billion, compared with the same period last year, the IEI reported. Exports, excluding diamonds, fell 23% to $16.7b. Exports of diamonds plunged 55% to $5.1b. during the January-June period. The Central Bureau of Statistics reported last week that exports of goods, not including diamonds, had risen by an annualized 1.2% in April-June, after declining at an annualized rate of 23.9% in January-March. The IEI said it expected exports of goods would fall 24% to $39b. in 2009; not including diamonds, they would drop 20% to $65b. In the previous five years, exports of goods grew at an average annual rate of 12%. In the first six months of the year, exports to the US, Israel's major export destination, fell 30% to $7.5b., led by a 54% plunge in the export of diamonds, at $2.2b. Exports to Hong Kong, the country's second-largest export destination, dropped 49% to $1.2b. Exports of diamonds to Hong Kong totalled $1.1b., down 51% compared with the same period last year. Exports to Belgium fell 59% to $1.15b., as exports of diamonds plunged 65% to $730 million. Exports to India were down 33% to $741m. In the first half of the year, the share of exports to European Union countries was 27.5%, down from 30.2% in the first half of 2008. The share of exports to North America was 36.2%, up from 34.1% last year. The share of exports to Asia was 18%, down from 19.4%.

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