Exports drop 19% but uptick expected

Exports drop 19% but upt

January 7, 2010 05:21
2 minute read.


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Israeli exports of goods and services fell 19 percent last year, the biggest decline in the country's history, the Israel Export Institute reported Wednesday. It attributed the drop to the global economic crisis and a steep decline in demand. "We have come out of this crisis better than other countries, but we still cannot say with certainty that we are past the crisis," Industry, Trade and Labor Minister Binyamin Ben-Eliezer said Wednesday. "But if the [encouraging] forecasts materialize, 2010 should be a positive turning point for Israeli exports. "2009 was the first year since the founding of the State of Israel in which exports of goods and services plunged by nearly $15 billion. We need to do everything to help boost exports, which is not an easy task in light of fierce competition between local and foreign manufacturers, because global markets are still in the process of healing their wounds. The name of the game in the coming years will be: Who will export unemployment to whom?" The export institute expects exports of goods and services in 2010 to grow 11%, to $73.4b., compared with 2009. Positive economic indicators over the past six months led to exports rising 8% in the fourth quarter, compared with the same quarter in 2008. Total exports of goods and services for 2009 are projected to be $66.2b., down 19% compared with 2008, the institute reported. Exports of goods not including diamonds are expected to be $35.5b., down 15% compared with 2008. Exports of goods not including electronic components are expected to be down 21%. Exports of diamonds fell an estimated 40%, to $5.8b., compared with 2008. Exports of services are expected to be down 13%, to $21b. Exports of goods to the US, the No. 1 buyer of Israeli products, fell 17% in 2009, compared with 2008, mainly due to a decline of 41% in diamond exports. Exports of goods to the US not including diamonds were unchanged in 2009, at $11.6b. Exports of goods to European Union countries, which make up 29% of total exports, were down 26%, to $10b., due in part to the weakness of the euro relative to the dollar. Exports of goods to Asia not including diamonds fell 13% to $5.8b. Exports to Asia made up 16.5% of the total volume of exports in 2009, compared with 16.1% in 2008 and 15% in 2007. In an effort to boost exports, the Finance Ministry announced Wednesday that the government would provide NIS 1b. in state guarantees through the country's banks to encourage export deals by easing credit and minimizing risks. The program includes the provision of guarantees for tenders and will be active until the end of 2010. Bank Leumi signed up for the program on Wednesday and will be the first bank to use the state guarantees for its export customers. Other banks interested in participating in the program will be able to join until the end of January. The Finance Ministry said exporters have not been able to get the necessary guarantees demanded by foreign customers as banks narrowed their credit frameworks, which led to the cancellation of some export deals. "The guarantees will enable Israeli exporters to take part and bid on new tenders overseas, compete with foreign companies and sign new export contracts," Accountant-General Shuki Oren said Wednesday.

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