Export growth expected to slow

Figures show that exports grew 11 percent in dollar terms in 2011, down from 19% in 2010.

haifa port 311 (photo credit: Ariel Jerozolimski)
haifa port 311
(photo credit: Ariel Jerozolimski)
Israeli exports will fail to record any growth in 2012 as the effects of the global economic slowdown reach local shores, the Israel Export Institute predicted Wednesday.
The forecast was made as the institute published figures showing that exports grew 11 percent in dollar terms in 2011, down from 19% in 2010.
Demand from Israel’s most important European trading partners should drop this year, and demand from the United States should only increase moderately, Export Institute chairman Ramzi Gabbai said. Exporters would also have to deal with the relative weakness of the shekel against other currencies, which follows five years of real appreciation, he said.
If the institute’s predictions prove correct, it will be only the fourth time in 20 years that Israeli exports have not recorded any substantial growth. Exports froze in 2009 during the global financial crisis and in 2001-02 during the global hi-tech slowdown.
To ensure continued growth, Gabbai said, exporters must intensify efforts to penetrate emerging markets in Asia, Latin America and Africa. According to the Export Institute, the US and the European Union still account for more than 60% of total Israeli exports.
Exports totaled $89 billion in 2010, and the 11% rise in dollar terms came largely as a result of the higher cost of raw materials and increased exportation to those same emerging markets Gabbai and government officials have been talking about.
Egypt was one of the fastest-growing export destinations for Israel in 2011, buying $209 million worth of Israeli products, an increase of 40% compared with 2010. This was despite overall trade falling by 23% as the flow of natural gas into Israel was disrupted by regular acts of sabotage on the Sinai pipeline.
Manufacturers Association of Israel president Amir Hayek said the data showed that the Israeli and Egyptian business sectors know how to differentiate between economic interests and the worsening political relationship between the two countries.