Current Account Data for Third Quarter, 2013

Bottom line: The current account for July-September 2013 posted its first deficit quarter since January-March 2012, as the deficit on trade in goods soared while the surplus in services shrank. However, despite the surprise caused by the sharp deterioration, it is almost certain to prove temporary, as data for October and November show exports rising and the trade deficit shrinking.

  • Overall, the swing into the red amounted to almost $1.9bn, from a surplus (revised down in the latest data) of $1.5bn in the second quarter to a deficit of $363m in the third.
  • The deficit on trade in goods jumped almost $1bn, from $2.27bn in the second quarter to $3.18bn in the third.
  • In the financial account, foreign direct investment (FDI) into Israel dropped to $2.2bn in the third quarter, after $4.8bn and $3.5bn in the second and first quarters, respectively. Israeli direct investment overseas jumped from $1.1bn to $1.45bn.
  • Israeli investment in foreign securities also rose sharply in the latest quarter, to $3.35bn – down from only $1.5bn in the second quarter, but similar to the amounts invested in the two preceding quarters.

Israel’s foreign currency reserves grew by only $377m in the third quarter, as the Bank of Israel reduced the extent of its purchases in the market.

 

Graph: Israelis’ portfolio investment abroad ($mn.).

A negative number indicates outflows, i.e. net overseas investment; a positive number indicates inflows, or net disinvestment.

 

invst abrd 2013q3

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