The escalating crisis in Europe is alarming Israeli manufacturers and exporters. "Because a third of Israeli exports are in euros, which are currently 20% below the level at the beginning of the year, and in addition, in the past two years, due to the dollar crisis, we focused on the eurozone, Israeli exporters are significantly exposed to the new crisis," said Manufacturers Association president Shraga Brosh today.
Brosh added, "There is no doubt that if the euro crisis worsens, we'll be forced to revise the growth forecast for the economy downwards. If we estimated 3.7% growth in 2010, and 4% growth in 2011, then in the coming weeks, depending on how the crisis develops we'll have to reassess growth."
Brosh said, "The big question is how will the euro crisis affect the US? As a result of the weakness of the dollar, the US began to export, especially to Europe. Therefore, the US, itself in the throes of a crisis, is also exposed to the crisis in Europe. If the US is affected, that will mean a greater impact on us."
Israel Export and International Cooperation Institute director general Avi Hefetz said, "In the past few months, we've heard from exporters about their difficulties on a number of counts: a drop in orders from Greece, Portugal, Ireland, and Spain too; payment arrears; and customers not meeting terms or facing financial difficulties. All these will unquestionably affect future Israeli export figures to crisis-ridden countries."
Israeli exports to Greece totaled $295 million in 2009 and exports to Portugal totaled $111 million. Although the scale of exports to these countries is not large, Hefetz said, "Every dollar counts, especially in times of crisis such as we have been through. Besides, exports to Spain reach about $1 billion."
Hefetz said that chemicals were Israel's leading export to the EU, and the industry was exposed to economic developments in Europe.
Published by Globes [online], Israel business news - www.globes-online.com - on May 6, 2010
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