Israeli exports suffered in 2015, but the decline wasn’t across the board.
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Among Israel’s top 10 export destinations, half showed big declines but two enjoyed major increases while the rest showed moderate improvement or no change, according to figures released by the quasi-governmental Export Institute on Wednesday. The figures could be interpreted as a barometer of Israel’s political ties or a changing world balance of economic power.
Israeli exports to Turkey, with which Israel has had tense relations since the fatal Mavi Marmara raid in 2010, plunged 40% last year to $1.7 billion. Most of the decline was due to lower dollar prices for chemical products and refined oil as world petroleum prices plunged.
But even after neutralizing for that effect, exports were down 18% for the year, the institute said. Although in recent weeks the two countries have been in talks about normalizing relations again, the 2015 export figures suggest that business relations with Turkey deteriorated last year.
Other big declines were in the euro zone. Exports to the Netherlands declined 14% to $2.1 billion, to Germany by 16% to $1.4 billion, to Italy by 23% to $800 million, and to Spain by 26% also to about $800 million.
Israeli relations with European Union countries have been rocky, with the EU last year imposing rules requiring products made in West Bank settlements be labeled as such. But much of the decline in Israeli exports was due to the decline of oil prices and to the euro’s 16% drop in value against the dollar. Israeli companies price products in euros for the European market but official export figures are denominated in dollars.
Those big drops, however, were partly offset by double-digit increase in exports to the rising world economic powers in China and India. The institute said exports to China last year climbed 21% to $3.1 billion while those to India rose 21% to $1.3 billion.
Israel’s biggest export to China is electronic components, which came to $1.6 billion last, a 53% rise over 2014, and thanks mainly to sales of semiconductors made by the Intel plant in Kiryat Gat. But other major categories include medical instruments, which is the fastest growing segment of China exports. Last year, they grew 14% to $260 million, but in 2011-15 they rose an average of about 27% a year.
The United States remained Israel’s single biggest overseas market, but last year exports were unchanged from 2014 at $11.2 billion. Exports to No. 2 Britain edged 2% higher to $3.7 billion, the same pace as to France, where exports reached $1.4 billion.
All told, however, exports of goods and services last year were down 7% to $92 billion, but Ofer Sachs, CEO of the Export Institute, is optimistic about this year, citing a recovery in world trade. He said exports to the U.S. should grow and those to the EU should see a modest recovery while exports to Asian should grow strongly.
“Despite a generally difficult picture, there are a number of sectors in high-tech where we’ve seen growth despite difficult conditions, which testifies to the strengthen of Israeli high-tech,” Sachs said.