Israel’s current account surplus widened to $9.1 billion last year from $6.9 billion the year before, while foreign investment rose, the Central Bureau of Statistics reported Thursday.
The CBS said the current account widened to 3% of gross domestic product last year from 2.4% in 2013 and just 0.8% in 2012.
Foreign direct investment –– acquisitions of Israeli companies by overseas companies – declined sharply last year to $6.4 billion from $11.8 billion. But foreign investment in Israeli stocks and bonds jumped to $9.8 billion from $1.8 billion in 2013, the CBS said.
The balance of payments figures illustrate the problem the Bank of Israel faces as it seeks to weaken the shekel to give a boost to the country’s exports. The trade surplus and influx of foreign investment, which has kept demand for the shekel strong and pushed its value higher, forcing the central bank to take countermeasures by lowering interest rates and buying dollars on the forex market.
In the fourth quarter, Israel’s current account surplus widened to $2.05 billion after two quarters of declines.
The CBS said the current surplus widened for the full year in 2014 as Israel’s deficit in primary income, coming from Israelis working abroad and income from overseas investments, narrowed to $4.8 billion from $6.3 billion the year before. Its surplus in secondary income, such as foreign aid and donations, grew to $10.1 billion from $9.1 billion.
But Israel’s surplus in merchandise and service trade narrowed last year by $476 million.