After eight years of multibillion dollar surpluses in Israel's current accounts, its current account surplus in 2011 almost vanished, amounting to just $190 million, the Central Bureau of Statistics reports. The current account balance was $6.34 billion in 2010 and $6.98 billion in 2009.
The current accounts balance records foreign currency flows from foreign trade in goods and services, plus transfer payments. The foreign currency inflows are a major reason for the shekel's exchange against other currencies, including the dollar and euro.
The main reason for the plunge in the current accounts balance in 2011 was the surge in imports of goods and the drop in exports. Israel's trade deficit in goods has quadrupled to $9.1 billion in 2011 from $1.95 billion in 2010. At the same, Israel's trade surplus in services was $7 billion in 2011, reducing the trade deficit to $2.1 billion.
Israelis' financial investments abroad more than halved to $11.6 billion in 2011 from $27.8 billion in 2010.
Israel's current accounts surplus rose from $2.15 billion in 2004 to $4.1 billion in 2005, and peaked at $7.02 billion in 2006. It fell to $4.56 billion in 2007 and to $1.83 billion in 2008, before rebounding in 2009-10.
Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2012
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