Israel’s Balance of Payments Surplus – New Record

Export surplus reached $400m in Q3 and $1.5b over the past six months. According to the figures, Israel is owed $30b by various countries, an increase of 50% from the preceding quarter

The Central Bureau of Statistics (CBS) announced last week that Israel’s balance of payments surplus grew by one third in the third quarter of 2006 to a record $2.4b from $1.8b in the preceding quarter.

Export surplus reached $400m in Q3 and $1.5b over the past six months.

According to the figures, Israel is owed $30b by various countries, an increase of 50% from the preceding quarter. The market’s foreign debt has shrunk 35% to $17.9b from $27.9b in September 2005. Foreign direct investment in Israel tripled in January-September to a record high of $9.6b. Foreign financial investment doubled to $6.7b.

Israeli direct investments overseas, including in income-producing real estate companies, grew sevenfold to a record high of $12b, while Israeli investment in foreign stock markets fell 12% to $5.1b.

Addressing the Israel Business Conference on Tuesday, Bank of Israel Governor Stanley Fischer said, “It appears that the rate of growth in 2006 will be 4.8%, slightly higher than our initial post-war forecast. Our forecast for 2007 still indicates healthy growth of 4%”.

Drawing attention to Israel’s open economy, Fischer cited statistics that Israeli investments in foreign markets reached about $21 billion by the end of November, including a record-breaking $12 billion in direct investments. He also noted that Israel is in second place, after the US, in terms of the number of companies listed on the Nasdaq stock exchange.

The CBS report noted that investment and capital flow figures into the Israeli economy and out from it were affected this year by two large transactions: Teva Pharmaceutical Industries’ acquisition of Ivax and Berkshire Hathaway’s acquisition of Iscar
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