Haifa port - Baz Ratner - 11102011
The Haifa port. Photo by Baz Ratner
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While some indicators for the third quarter announced yesterday were upbeat, or at least neutral, Israeli exports of goods and services fell hard in the third quarter of 2011, according to data released by the Central Bureau of Statistics yesterday.

The more exports fall, the greater the threat to Israeli economic growth and jobs, say analysts.

One relatively neutral figure was Israel's gross domestic product, which rose by 3.4% during the third quarter in annualized terms, only slightly less than its 3.5% increase in the second quarter and lower than its 4.7% gain in the first quarter.

The increase in GDP was primarily due to rising investment in fixed assets and a moderate increase in private consumption. Investment in fixed assets increased by 13%, the statistics bureau said.

The figure is regarded as a positive indicator for future economic growth.

But imports of goods and services are a key growth engine for Israel, and they tumbled by nearly 17% in the third quarter, in annualized terms, because Israel's target markets were simply not in the shape to buy many goods.

Israel's main target markets are the United States and Europe, both of which are in financial doldrums. While nobody is surprised about the drop, the Central Bureau of Statistics yesterday revealed the scope of the problem.

Israel's exporters and economic leaders have been making efforts to enter new markets beyond Europe and the United States. Apparently, they began that effort on the late side.

Still, while the statistics the bureau released yesterday show Israeli economic growth is slowing - recession is not here. The West would surely envy the 3.4% pace of economic growth that Israel achieved in the third quarter, even if it is well below growth rates in China and India.

Economists predict growth in Israel will slow during the fourth-quarter, because the pace has been trending downward. In the last quarter of 2010, the pace was 7.2% in annualized terms.