Exports of goods excluding diamonds dropped by 7.7% compared to March-April 2012, totaling some $7.5 billion.
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The Export Institute attributes the drop to a 19% decrease in Israel's export of medicine. However, even without this factor, Israeli exports still dropped by 5.8% - the sharpest decline in two years.
High-tech exports totaled $3.45 billion, down 7.2% compared to March-April 2012. Export of communications, medical, and scientific equipment dropped by 4.6% and totaled $1.26 billion. Aircraft exports were also down by 2.4%, comprising $278 million.
A container ship in the Haifa Port (Photo: Avishag Shaar-Yashuv)
Finance Minister Yuval Steinitz told Mamon that "There are indeed signs of a significant slowdown in the economy. We see this in decreased taxes, and unfortunately also in the worrying situation in the business sector, part of which is the result of protests and an intentional slowdown of consumption."
"The European crisis is also having an effect," the minister noted. "The negative atmosphere has also caused currency values to drop, and that's not a good sign."
The Export Institute numbers match data from the Central Bureau of Statistics (CBS) for this year, which show that from January-June 2012 Israel's trade deficit totaled NIS 38 billion, compared to a deficit of NIS 23 billion for the period up to June 2011.
A slowdown in exports has been noted since the start of 2011, when the European debt crisis began to make itself felt in euro zone nations and in decreased demand for Israeli products. From 2010-2011, Israel's exports rose by 7.6%, compared to a 17.1% rise in imports.
Frozen exports, compared to the ongoing increase in imports, have caused exports to represent a small portion of Israel's foreign trade. In 2010 exports comprised 83.2% of imports, whereas in 2011 that number dropped to 75.4%, and in the first half of 2012 exports dropped to only 67.5% of imports.
The growing trade deficit is harmful to the Israeli economy in two aspects: the growing trade deficit is driving the shekel down, and decreased exports are hurting Israeli manufacturing, which produces mostly for foreign customers.