Israel’s Balance of Payments Improved by 20 Percent in 1976

According to figures released here by the government of Israel Investment Authority, Israel’s exports in 1976 rose by more than 26 percent and exports to the United States increased by 34 percent over the previous year. These gains contributed to a decrease in Israel’s balance of payments deficit of 20 percent over 1975. The figures were released by a government spokesman following presentation to the Knesset Monday by Minister of Finance Yehoshua Rabinowitz of his government’s $13.5 billion budget for fiscal 1977-78.

The export increases exceeded national planning goals by 70 percent. Overall Indus- trial exports rose by 28 percent. The largest export increase was in the metal, machinery and electronics industries which showed a gain of more than 50 percent over 1975. This, according to the spokesman, signifies a restructuring of Israel’s industrial production in favor of high-technology goods.

In addition, the tourism industry, one of Israel’s top foreign currency earners, experienced a boom in 1976. Tourist arrivals in Israel increased by 28 percent over 1975, reaching a total of 795,000. Income from tourism grew by 20 percent.

Closing the balance of payments gap has been Israel’s top priority. The main economic tradeoff, resulting from the significant improvement in 1976, was a relatively high rate of inflation. In 1977, however, the government expects the rate of inflation to drop substantially.

National goals for 1977 will be to increase exports by 14 percent, mainly of industrial goods. These exports are encouraged by the government policy to secure profitability. In addition, recent duty-free trade agreements with both the European Economic Community and the United States are likely to boost industrial exports in 1977.