​Summary:

  •  Israel's current account was balanced in 2011. This followed two years of large surpluses of $6-7 billion a year and smaller surpluses since 2003.  
  • Marked growth in the purchases of durable goods and in investment--uses which are primarily based on imports--was due to rapid growth in demand and the economy's approach to full employment.  
  • The rapid rise in the price of fuel and other commodities increased expenditure on the import of goods by $3.6 billion relative to 2010.  
  • The economic crisis in Europe slowed the growth of Israeli exports during the last third of the year. Europe is the destination for one-third of Israeli exports while European exports, which are expected to benefit from the depreciation of the euro, are the main competition for Israeli exports to the US and other markets.  
  • Israel's exports to its trading partners lagged behind imports somewhat this year, which should be viewed against the background of the real appreciation in previous years.  
  • The discovery of gas reservoirs has until now led to an increase in investment in the natural gas industry, which has widened the deficit in the current account; however, in coming years it will lead to a significant improvement.  
  • The appreciation of the shekel during the first half of the year, in spite of the growing geopolitical uncertainty, the imposition of restrictions on short-term capital flows and the large decline in the surplus of the current account, were the result of the interest gap between Israel and the advanced economies and the rapid growth in Israel.  
  • The growing fear of a debt crisis in Europe in mid-year led to a turnaround in short-term capital flows and a prolonged depreciation. This was part of the general flow of capital to countries that are considered to be safe havens, which led to the depreciation of currencies world wide against the dollar and the yen.  
  • The asset surplus of the economy relative to the rest of the world and its composition contribute to the resilience of the economy during periods of crisis.  


The Balance of Payments - PDF file