Is it a sign that Israeli economic growth is slowing down? In April and May, exports shrank by about 4.5% in dollar terms compared with the two preceding months, says the Ministry of Industry, Trade and Labor.

It is the first time since the beginning of 2009 that exports of goods (excluding diamonds ) contracted, says the ministry.

One might immediately assume that the problem was the debt crisis in Europe depressing demand from the continent, a key market for Israeli exporters. But it wasn't - the problem lay in Asia.

Exports averaged just $3.45 billion in each of the two months, compared with $3.6 billion in each of the months February and March, the figures show. None of these numbers include diamonds, and they have been adjusted for seasonality.

Ministry officials caution that one cannot draw conclusions about trends from the data of two months. They also say that in February and March, exports to Asia had been particularly high.

However, the figures for April and May comply with other indicators showing clouds looming over Israeli exports. According to figures from the Central Bureau of Statistics, September 2009 was the last month in which export growth ramped up.

Possibly Israeli exports are hurting as global trade pulls back. The Baltic Dry Index of shipping is a commonly watched indicator of global trade. It tracks all goods loaded, unloaded and shipped across the globe daily, from seeds to coal. In the last month the trend has reversed downward to show a steep drop in trade.

The BDI peaked in May 2008 at 12,000 points. Now it's at 2,784 points, though its lowest point was at the beginning of 2009, when it fell to 665 points.

Another indicator portending ill is the purchasing managers index put out by Bank Hapoalim along with the Israel Purchasing and Logistics Managers Association. It plunged in May, falling 11.1% to 48.1%, from 59.2% in April. The debt crisis in Europe evidently spooked Israel's purchasing managers: May was the first time in 11 months that the index fell below 50%.

One key question is whether the Bank of Israel will raise interest rates for July. Economic analysts think not: The higher the local interest rates, the stronger the shekel is likely to become, which is bad for exporters.

Given the latest figures on exports, analysts generally feel an interest rate hike for July is even more unlikely.