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Trade deficit seen doubling in 2012

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Friday, March 30th, 2012

As reported in Globes:

Foreign trade figures continued to be a source of worry in February 2012, as the deficit widened. The trade deficit totaled NIS 4.63 billion in January-February, 77.6% more than in the corresponding months of 2011. At the current rate, the trade deficit in 2012 will be double the deficit in 2011.

The trade deficit, excluding diamonds, planes, and energy products, doubled in January-February to over NIS 1.6 billion. The export-import ratio fell to a new low of 59% in February, down from 74% in 2011 and 83% in 2010.

No less worrying is the drop in industrial exports, including high-tech exports – the economy’s main growth engine – to NIS 5.9 billion in February, 17% less than in February last year, excluding seasonal factors. Trend figures highlight the fact that high-tech exports have been falling since the beginning of 2012.

The most worrying aspect in high-tech exports is the performance of the pharmaceutical industry, the largest high-tech subsector, accounting for a third the total. Pharmaceutical exports fell 31% to NIS 2.5 billion in January-February from NIS 3.6 billion in the corresponding months. Exports of electronic components also fell, albeit by less than pharmaceuticals.

Meanwhile, the growth in imports is continuing, mostly driven by higher fuel imports, which rose 64%, due the rise in the price of oil. Imports of durable goods also rose, indicating that consumer consumption is still solid.

Published by Globes [online], Israel business news – www.globes-online.com – on March 12, 2012