Israeli exports are expected to reach record highs of between $135 billion and $140 billion in 2021, up 18.5% from last year, the Ministry of Economy and Industry projected on Monday in a new report.
The ministry said the data was gleaned from the first three quarters of 2021. In 2020, Israeli exports reached $114 billion, preceded by $117 billion in 2019, according to ministry data.
For the first time, exports of “services” — a loose term that includes Israeli technology services like cybersecurity and artificial intelligence — appeared to be exceeding exports of goods, the ministry noted. In 2021, exports of services are set to amount to 51%, with 49% for goods.
Exports resulting from the sale of startups and companies jumped by about 257%, leading service exports to increase overall by 30%, the ministry said.
In the tech sector, exports of programming services and research and development services grew by 25% and 15%, respectively, the ministry said.
The commodities sector, meanwhile, grew by 15%, “an increase that has not been seen in recent years,” according to the report. The strongest commodities sub-sector was the diamond exports, which grew by 65% in 2021.
A majority of Israeli exports (not including diamonds) went to the European Union (39%), followed by the US (33%) and Asia (25%).
“The year 2021 will break records in Israeli exports and its components,” said Ohad Cohen, director of the Foreign Trade Administration at the Ministry of Economy and Industry, in a ministry announcement on Monday. “Whether we reach the $ 140 billion threshold or not, this is an all-time high in exports, which was slightly halted in 2020 due to the corona[virus] pandemic. The exports sector showed an impressive recovery in late 2020 and even more so in 2021, both in the exports of goods and in the export of services.”
“This is not a correction… but a clear significant growth in Israeli exports,” added Cohen, pointing to the $117 billion in exports in 2019. “This growth comes despite the fact that the tourism sector has not yet fully returned to full operations this past year and although the corona[virus] challenges in the target markets have continued and even increased recently.”
Minister of Economy and Industry Orna Barbivai said, “A stable and growing economy is one that allowed many challenges to be met, which characterizes Israel.”
Earlier this month, the OECD said that the Israeli economy was rebounding strongly in 2021, beating forecasts. The organization cited the country’s ongoing booster vaccination campaign, a recovering labor market, and a booming local tech sector.
“Economic activity rebounded strongly in 2021 and GDP is projected to grow robustly by 6.3% in 2021, 4.9% in 2022 and 4% in 2023,” the OECD said in its December 2021 Economic Outlook report for Israel.
On Monday, consulting multinational Dun & Bradstreet said Israel’s economy grew by seven percent in 2021, beating out a global average of 5.9%. India’s economy grew by 9.5%, according to the study, and China’s by 8%.
The Dun & Bradstreet report noted that although Israel’s economy was showing significant improvement, driven by a strong tech sector and booming real estate activity, a number of industries such as tourism, restaurant, and entertainment continued to suffer in 2021.
In addition, a shortage of raw materials and supply chain disruption as a result of the COVID-19 pandemic have negatively affected the construction and electric goods sectors as well, the report said.