Israel's 2016 Current Account Fell to $12.4 Billion

Trade deficit narrowed but foreign direct investment rose.

Moti Bassok
Moti Bassok
Send in e-mailSend in e-mail
Mixed denomination Shekel currency banknotes sit on display in this arranged photograph at Israel's central bank in Jerusalem, Israel, on Monday, Aug. 19, 2013.
Mixed denomination Shekel currency banknotes sit on display in this arranged photograph at Israel's central bank in Jerusalem, Israel, on Monday, Aug. 19, 2013.Credit: Ariel Jerozolimski, Bloomberg
Moti Bassok
Moti Bassok

The surplus in Israel’s current account narrowed by 9.5% last year but it still remained quite large, equal to 3.9% of gross domestic product, the Central Bureau of Statistics reported Wednesday.

The surplus, which reflects Israel’s trade balance as well as income from investments and remittances from cross-border employment, declined to $12.4 billion in 2016 from $13.7 billion in 2015.

Israel’s trade surplus in goods and services – the single biggest factor – narrowed $7.1 billion from $9 billion, the CBS said. Exports of goods and services rose 3.2% to $894.9 billion but imports rose a faster 5.8% to $87.8 billion.

Foreign direct investment marked a second year of recovery from a 2014 slump, climbing to $12.3 billion last year from $11.5 billion in 2015 and just $6.7 billion in 2014, the CBS said.

Israel’s persistent current account surpluses and the influx of foreign investment have contributed to the strengthening of the shekel, forcing the Bank of Israel into an increasingly controversial policy of buying foreign currency to weaken it.

Omer Moav, professor of economics at Hebrew University, told Reuters Wednesday that one solution would be to remove barriers to imports such as tariffs, which would weaken the shekel by bringing in more dollars. That would help exporters as well as lower consumer prices.

“Why export more than import? Why does that make sense?” he said.

Click the alert icon to follow topics:

Comments

SUBSCRIBERS JOIN THE CONVERSATION FASTER

Automatic approval of subscriber comments.

Subscribe today and save 40%

Already signed up? LOG IN

ICYMI

Trump and Netanyahu at the White House in Washington, in 2020.

Three Years Later, Israelis Find Out What Trump Really Thought of Netanyahu

German soldier.

The Rival Jewish Spies Who Almost Changed the Course of WWII

Rio. Not all Jewish men wear black hats.

What Does a Jew Look Like? The Brits Don't Seem to Know

Galon. “I’m coming to accomplish a specific mission: to increase Meretz’s strength and ensure that the party will not tread water around the electoral threshold. If Meretz will be large enough, it will be the basis for a Jewish-Arab partnership.” Daniel Tchetchik

'I Have No Illusions About Ending the Occupation, but the Government Needs the Left'

Soldiers using warfare devices made by the Israeli defense electronics company Elbit Systems.

Russia-Ukraine War Catapults Israeli Arms Industry to Global Stage

Flame and smoke rise during an Israeli air strike, amid Israel-Gaza fighting, in Gaza City August 6, 2022.

Israel Should End Gaza Operation Now, if It Can