In 2020 Israeli export totaled $107 billion, down 3% from last year, a report published by the Israel Export Institute reveals. The number is not high, considering that the International Monetary Fund expects the world trade to decline by a whopping 10%.

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The export of tourism and transportation services fell by about 45% due to the coronavirus pandemic. The dramatic blow to these industries was offset by the sharp increase in the export of software and research development services. The Israeli high-tech export increased by 7%, making up more than half of all Israeli export.

The export of goods totaled $54 billion, a decrease of 4% from last year. Export of commodities to the European Union fell by about 14% to $14 billion, and to the United States by about 3% and amounted to about $20.5 billion. Goods export to Asia remained unchanged and amounted to about $10 billion.

The Institute predicts that Israeli export will increase by 7% in 2021 to $115 billion.

"These figures indicate the importance of export in keeping the Israeli economy strong and stable," Israel Export Institute head Gadi Ariely said.

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Israel must pass a 2021 state budget promptly to help prioritize spending, position the economy for growth and reduce economic uncertainty associated with the coronavirus pandemic, the International Monetary Fund said on Thursday.

The IMF, at the end of a delegation visit to Israel, said both monetary and financial policies need to remain accommodative, while fiscal policy should continue to prioritize health spending and gradually become more targeted.

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Political squabbling has prevented the passage of both the 2020 and 2021 budgets.

The IMF praised Israel for a large and rapid response to the COVID-19 crisis while "timely and decisive measures introduced by the Bank of Israel at the outset of the pandemic have helped preserve market and financial stability and access to credit."

Fiscal support to the health system, households, and businesses has also helped soften the economic impact of the pandemic, an IMF report said. That led the economy to contract less than other advanced economies in 2020 and it is projected to rebound in 2021 as long as the crisis is contained, it said.

"In this challenging environment, policies should continue to provide support to the economy, contain the risks associated with the pandemic, and promote recovery," the report said. "Fiscal policy needs to become gradually more targeted to maximize the impact of the available fiscal space [and] monetary and financial policies need to remain accommodative."

Israel's central bank at the outset of the crisis trimmed its benchmark interest rate to 0.1% from 0.25%. But policymakers have largely focused on other policies such as buying government and corporate bonds and encouraging banks to lend to small businesses through very low interest loans.

Israel's economy is projected to shrink as much as 6.5% in 2020 and recover by up to 6.5% in 2021.

The government also has approved a stimulus package of some 140 billion shekels ($42 billion) that the IMF said "strikes a balance between protecting the economy from a larger downturn and preserving some fiscal space to meet future shocks."

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Business leaders and politicians have gathered in Bahrain to discuss the plan that Washington says is vital to ending the decades-old Israeli-Palestinian conflict, but which Palestinian leaders have dismissed as pointless without a political solution.

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"One of the really good aspects of the plan ... is that it identifies some of the sectors, some of the industrial and economic sectors, that will be conducive to jobs," IMF managing director Christine Lagarde said during the opening session.

"It cannot be any kind of growth in the West Bank and Gaza, it needs to be job intensive," she added, listing agriculture, tourism and construction as sectors that "will absorb a lot of labor."

The IMF expects the Palestinian economy to contract by 1.6% this year and says unemployment stands at 30% in the West Bank and 50% in Gaza.

"There is an economic plan, there is urgency: it is a question of making sure that the momentum is sustained," Lagarde said.

The IMF has been operating in the West Bank and Gaza since 1995, providing loans, credit guarantees, and policy advice to the Western-backed Palestinian Authority.

Saudi Arabia's minister of state said the US economic plan could succeed since it includes the private sector and if "there is hope of peace."

"I truly believe it can be done if people do believe that it can be done," Mohammed Al-Sheikh told the economic summit in Bahrain.

"And the way to make the people on the ground believe is give them hope that this will be sustainable, that this will be everlasting and that ultimately there will be prosperity and there will be sustained development," Al-Sheikh added.

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