Trade Gap Swelled 56% in August as Import Growth Exceeded Exports

Exports reached NIS 16.2 billion, after growing at an annual rate of 8% in June-August.

Israel's trade deficit swelled to NIS 8.9 billion in August - a 56% increase compared with the same time a year ago.

Although exports did increase in August, the rate didn't keep pace with growth in imports, according to Central Bureau of Statistics figures released Wednesday.

The figures for August widened the average monthly trade deficit, for the first eight months of the year, to NIS 6.7 billion.

That works out to a massive NIS 79.9 billion on annualized basis for all of 2012.

In 2011 Israel ran a trade deficit of NIS 52.2 billion; in 2010 the deficit was just NIS 29 billion, according to the bureau's figures.

Israeli exports held up relatively well, even though key markets like the European Union and the United States remain sluggish. The increase in growth that was achieved in August was largely due to ramped-up production at the Intel semiconductor plant in Kiryat Gat. Its sales are so large they influence israel's entire trade balance.

Exports reached NIS 16.2 billion, after growing at an annual rate of 8% in June-August. That reflected a slight slowdown from an 8.9% pace in the previous three months, the CBS said.

Industrial exports, which make up close to 90% of Israel's total, continued to grow in the June-August period but at a slower pace than before. They increased at a 6.5% pace in the three months, down from an 8.4% rate in March through May, the stats bureau said.

High-tech exports, which include everything from electronics to pharmaceuticals, led the growth, rising at a 21.1% annual rate in the three months. Drug exports soared at a 45.9% rate while those of electronic components rose at a 14.2% rate, the stats bureau said.

Products entailing lower levels of technology grew at a stickier annual rate of 2% in the three months, while more traditional manufactured products posted drops of between 5% and 8.4% on an annualized basis.

Imports in June-August of goods and services climbed to NIS 25.1 billion, up 5% in annualized terms. That marks a quickening pace of growth after a 4% annualized rise in March through May, the bureau's figures show.

The increase in imports was led by inputs for industry, with imports of raw materials spiking higher at a 13.9% annualized increase in the June-August period. In particular, imports of iron and steel posted a 31.4% annualized rise. By comparison, imports of consumer goods rose by just a 2.9% rate in June-August.

Among imports of raw materials, the value of energy imports ballooned 44.5% in the first eight months of the year, compared with the same time in 2011, to NIS 44.8 billion as global oil prices rose. The price of Brent crude for October delivery, which expires Thursday, was $116.48 a barrel on Wednesday, close to its highest point since August 16. However, imports of unpolished diamonds - nearly all of which are re-exported after processing - dropped to NIS 19.2 billion in the first eight months of 2012, from NIS 24.9 billion in the same period last year.