Israel - Balance of payments

Israel's foreign trade has consistently shown an adverse balance, owing mainly to the rapid rise in population and the expansion of the industrialized economy, requiring heavy imports of machinery and raw materials. The imbalance on current accounts has been offset to a large extent by the inflow of funds from abroad. Deficits are often offset by massive US aid and American Jewish philanthropy. Even with these funds, however, Israel has in recent years been running increasingly larger deficits, reaching 4.7% of GDP in 1995. Financing this deficit is easier on Israel than on many nations primarily because of its relationship with the US. Foreign direct investment reached a record $5 billion in 2000, and total foreign investment stood at a record $9 billion.

The US Central Intelligence Agency (CIA) reports that in 2002 the purchasing power parity of Israel's exports was $28 billion while imports totaled $30.8 billion resulting in a trade deficit of $2.8 billion.

The International Monetary Fund (IMF) reports that in 2001 Israel had exports of goods totaling $27.7 billion and imports totaling $30.9 billion. The services credit totaled $12 billion and debit $12.6 billion. The following table summarizes Israel's balance of payments as reported by the IMF for 2001 in millions of US dollars.


Current Account -1,852
Balance on goods -3,264
Balance on services -572
Balance on income -4,414
Current transfers 6,399
Capital Account 681
Financial Account -110
Direct investment abroad -1,135
Direct investment in Israel 3,224
Portfolio investment assets -1,199
Portfolio investment liabilities 656
Other investment assets -2,850
Other investment liabilities 1,194
Net Errors and Omissions 1,477
Reserves and Related Items -196

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