Israel: Trade deficit widens in annual terms in August, exports contract
September 17, 2018
Israeli exports contracted 0.8% in August over the same month a year ago in USD terms, contrasting July’s revised 5.1% expansion (previously reported: +7.9% year-on-year). Trend data for June–August showed a broad-based deterioration, with exports in low-, medium-low, and medium-high-technology sectors decreasing over the previous rolling quarter. Foreign demand for chemicals and chemical products; basic metals; and wood products, furniture and paper products dropped particularly strongly.
Import growth moderated but remained healthy, registering 15.1% in USD terms in August over a year ago (July: +25.0% year-on-year). Data for the June–August period highlighted continued robust demand for consumer goods and raw materials—particularly agricultural products. Consumer goods imports were chiefly driven by demand for non-durable goods such as clothing and footwear. On the other hand, Israeli demand for investment goods swung from a robust expansion in the previous rolling quarter to a sizable contraction in June–August. Imports of machinery and equipment, and transport equipment for investment recorded noticeable drops.
As a result, the trade deficit widened to USD 2.7 billion from the USD 1.8 billion shortfall recorded in the same month a year prior, while the 12-month rolling trade deficit widened from USD 22.2 billion in July to USD 23.2 billion in August.
Author: Jan Lammersen, Economist