Trade Deficit Sinks, First Benefit of Gas Finds

Israel's trade deficit was down 70% in the first quarter of 2015, compared to the last quarter of 2015.

Yaakov Levi,

Israeli Tamar gas rig
Israeli Tamar gas rig
Flash 90

Israel's trade deficit was down 70% in the first quarter of 2015, compared to the last quarter of 2015. Between October and December of last year, Israel imported $18.2 billion worth of goods and services, but that number fell to $15.5 billion between January and March of this year.

Unfortunately, exports were down as well, but by a smaller margin. Exports in Q4 2014 stood at $15.8 billion, compared to $14.8 billion in Q1 2015. The fall in exports was attributed to a loss of customers in Russia for Israeli products, especially agricultural products, due to the crash of Russia's economy over the past several months.

Exporters hope that that will be a temporary phenomenon, and are planning to more aggressively pursue sales in other countries, such is the Far East and Latin America, to make up for the shortfall. But the drop in imports appears to be much more sustainable, and even structural – meaning that Israel should be importing a lot less now than in the past.

According to the Economy Ministry, most of the drop in imports was due to a reduction in the amount of oil and gas Israel purchased abroad – with the country substituting natural gas from offshore fields for those resources.

In addition, the recent weakness of the shekel versus the dollar has contributed to lowering the deficit as well.




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