Israel: Exports and imports fall sharply in May
June 12, 2019
Merchandise exports contracted 8.5% year-on-year in May in USD terms, following a revised 13.0% decline in April (previously reported: -18.0% year-on-year). Imports were down 6.3%, coming after April’s 0.1% decline. The trade deficit was roughly unchanged in year-on-year terms at USD 1.5 billion.
Looking at trend data for March-May, export growth ebbed notably from the previous rolling quarter, likely weighed on by the stronger shekel and a less favorable external environment. Lower-tech exports continued to decline, while high-tech exports also fell, weighed on by the volatile pharmaceutical sector. Turning to imports, trend data reveals only modest growth, with lower raw material imports largely offsetting higher consumer and investment goods imports. A surge in vehicle imports ahead of environmental tax changes appeared to support consumer and investment goods imports.
Looking ahead, a global economic slowdown and trade tensions will likely weigh on exports this year, while import growth should moderate sharply on a tough base effect.
Author: Oliver Reynolds, Economist