Israel’s balance of payments surplus soared to a record 3.8 billion shekels, almost $1 billion, thanks to a worldwide decline in the prices of oil and natural gas, Globes reported on Sunday.
The unprecedented surplus was in the third quarter, according to a report published by Ministry of Finance chief economist Yoel Naveh.
The balance of payments surplus refers to the amount by which the money coming into a country is more than the money going out during a particular period of time.
The monetary impact of the surplus registers as pressure toward appreciation of the shekel, offsetting the Bank of Israel’s policy of retaining a negligible interest rate, despite the recent interest rate hike by the Federal Reserve.
Inflation expectations in Israel continue to drop while the Fed is raising its interest rate, according to figures released on Sunday by the Bank of Israel. The figures, based on forecasts by leading analysts, show expectations of a 0.5 percent rise in the Consumer Price Index over the next 12 months, compared with last month’s 0.7 percent projection.
The drop in inflation expectations is consistent with the Consumer Price Index, which fell 0.4 percent in November, thereby putting the inflation rate for the past 12 months at -1 percent.
Naveh announced that the 5.1 percent ratio of balance of payments to GDP in the third quarter was the highest since the first quarter of 2010. He attributed the surplus to exports of goods and a drop in imports. The surplus of exports over imports reached NIS 2.5 billion in the third quarter, a historically high level.