Israel's trade deficit almost tripled to $6.2 billion in January-May 2011 from $2.2 billion in the corresponding months of 2010, the Central Bureau of Statistics reported today. The trade deficit for May rose to an all-time high of $1.89 billion from $790 million in May 2010.
The trade deficit, excluding planes, ships, and diamonds rose to an all-time high of $1.5 billion in May. Imports of goods totaled $6.8 billion and exports of goods totaled $5.3 billion.
The jump in the trade deficit was due to a sharp increase in imports, including electronics, combined with a slowdown in exports, including industrial exports.
Fuel imports in May were lower than in April. Imports in May rose for the seventh consecutive month. Imports in January-May were 15% higher than in the corresponding months of last year.
Exports in May were 3.5% lower than in April. Industrial exports, Israel's growth engine, fell by a similar amount.
Imports of investment goods were 10% higher in May than in April, mainly due to higher imports of mobile devices. Imports of investment goods were 22.5% higher than in the corresponding months of last year.
Manufacturers Association president Shraga Brosh lambasted the Ministry of Finance, saying, "We've asked the Ministry of Finance for an urgent meeting on the issue and met with no response. The finance minister thinks that he is managing his own grocery story, but he should realize that he is responsible for the country's economy. To get into a huff is suitable for a toddler, not for an economic leader who is bears such an onerous burden."
Brosh continued, "The Ministry of Finance is complacent. It doesn’t understand that this problem affects the future. It prefers to look at the past. Meanwhile, the ministry levied NIS 6 billion in new taxes on the business sector in the 2011-12 budget, the dollar is falling, and the US and Europe are in recession."
Minister of Finance Yuval Steinitz's chief of staff David Sharan said in response, "The Ministry of Finance works unceasingly for exporters. Just last month, we launched a NIS 2.75 billion to strengthen the competitiveness of Israeli exports and to encourage exports."
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