Israel’s Balance of Trade: November 2025 Release and Macroeconomic Implications
Table of Contents
The latest Balance of Trade (BoT) data for Israel, released on November 16, 2025, reveals a deficit of ILS -2.78 billion. This figure is significantly better than the market estimate of ILS -3.40 billion and an improvement from October’s deficit of ILS -3.17 billion. According to the Sigmanomics database, this is the narrowest trade gap since May 2025, when the deficit stood at ILS -3.64 billion.
Drivers this month
- Exports rose by 4.50% MoM, driven by technology and pharmaceuticals sectors.
- Imports contracted by 2.10% MoM, reflecting weaker domestic demand and lower commodity prices.
- Energy imports declined amid global oil price stabilization.
Policy pulse
The BoT improvement aligns with the Bank of Israel’s recent monetary tightening, which has strengthened the ILS and curbed import inflation. Fiscal discipline has also helped reduce external vulnerabilities by limiting government spending growth.
Market lens
Immediate reaction: The ILS appreciated 0.30% against the USD within the first hour post-release, while 2-year government bond yields fell 5 basis points, signaling investor confidence in external balance improvements.
Israel’s trade deficit of ILS -2.78 billion in November 2025 compares favorably with the 12-month average deficit of ILS -3.45 billion. Over the past year, the trade gap has fluctuated between a high of ILS -4.06 billion in August and a low of ILS -2.87 billion in April, indicating persistent but manageable external imbalances.
Monetary Policy & Financial Conditions
The Bank of Israel’s policy rate currently stands at 4.75%, up from 3.25% a year ago. This tightening cycle has helped stabilize the currency and reduce import-driven inflation. Financial conditions remain moderately tight, with credit growth slowing to 3.20% YoY from 5.10% last year.
Fiscal Policy & Government Budget
Fiscal consolidation efforts have kept the government deficit below 3% of GDP in 2025, supporting external balance by limiting domestic overheating. Public debt remains stable at 65% of GDP, reducing sovereign risk premia.
External Shocks & Geopolitical Risks
Regional tensions persist but have not escalated to disrupt trade flows significantly. Global supply chain normalization and easing commodity price volatility have contributed to the improved trade balance.
Market lens
Immediate reaction: The ILS strengthened against major currencies, with the USD/ILS pair dropping 0.30% post-release. Short-term government bond yields declined, reflecting reduced risk premia and improved investor sentiment.
This chart signals a clear trend toward external balance improvement, reversing the widening deficit seen in mid-2025. Sustained export growth combined with controlled import demand suggests Israel’s trade position is stabilizing amid global headwinds.
Looking ahead, Israel’s trade balance trajectory depends on several factors, including global demand, commodity prices, and geopolitical developments. We outline three scenarios:
Bullish Scenario (30% probability)
- Global tech demand surges, boosting exports by 7% YoY.
- Energy prices remain stable or decline, reducing import costs.
- Geopolitical tensions ease, facilitating trade flows.
- Trade deficit narrows further to below ILS -2.00 billion by Q1 2026.
Base Scenario (50% probability)
- Moderate export growth of 3-4% YoY.
- Import levels steady with slight increases due to domestic demand.
- Trade deficit remains near current levels around ILS -2.70 billion.
Bearish Scenario (20% probability)
- Global slowdown hits export sectors, growth stalls or contracts.
- Rising energy prices increase import costs by 5-7%.
- Geopolitical risks disrupt trade routes, widening deficit beyond ILS -3.50 billion.
Policy pulse
Monetary policy will likely remain vigilant, balancing inflation control with growth support. Fiscal policy may adopt targeted stimulus if downside risks materialize, especially to support export industries.
Israel’s November 2025 Balance of Trade report signals a welcome improvement in external accounts. The narrowing deficit reflects resilient exports and moderated imports amid a complex global backdrop. Monetary and fiscal policies have contributed to this stabilization, but risks from geopolitical tensions and global economic uncertainty persist.
Maintaining this positive momentum will require continued policy vigilance and diversification of export markets. Investors and policymakers should monitor commodity price trends and regional developments closely. Overall, the data supports a cautiously optimistic outlook for Israel’s external sector heading into 2026.
Key Markets Likely to React to Balance of Trade
Israel’s Balance of Trade data historically influences currency, bond, and equity markets sensitive to external trade dynamics. The following symbols are key to watch for market reactions:
- USDILS – The USD/ILS currency pair typically moves inversely to trade balance improvements, reflecting currency strength.
- TEVA – A major pharmaceutical exporter, TEVA’s stock price correlates with export sector performance.
- NICE – Technology exports impact NICE’s valuation, linking it to trade data.
- BTCUSD – Bitcoin’s price often reflects broader risk sentiment influenced by macroeconomic data.
- EURILS – The Euro to Israeli Shekel rate also reacts to trade balance shifts, given EU-Israel trade ties.
Insight: Since 2020, the USDILS exchange rate has shown a strong inverse correlation (-0.65) with Israel’s monthly trade deficit. Narrowing deficits have coincided with ILS appreciation, underscoring the currency’s sensitivity to external balance shifts. This relationship highlights the importance of trade data for forex traders and policymakers alike.
FAQs
- What does Israel’s Balance of Trade indicate about its economy?
- The balance of trade reflects the difference between exports and imports. A narrowing deficit suggests improving external competitiveness and economic resilience.
- How does the Balance of Trade affect Israel’s currency?
- A smaller trade deficit typically strengthens the Israeli Shekel, as it signals higher foreign currency inflows from exports relative to outflows for imports.
- What are the risks to Israel’s trade balance outlook?
- Risks include global economic slowdown, rising commodity prices, and geopolitical tensions that could disrupt trade flows and widen the deficit.
Takeaway: Israel’s November 2025 trade data points to a stabilizing external sector, supported by policy and global trends, but vigilance remains essential amid persistent risks.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The November 2025 trade deficit of ILS -2.78 billion marks a 12.30% improvement from October’s ILS -3.17 billion and a 19.40% improvement compared to the 12-month average deficit of ILS -3.45 billion. This reversal follows a three-month trend of narrowing deficits after a peak in August.
Exports have steadily increased by 4.50% MoM, led by high-tech and pharmaceutical sectors, while imports declined by 2.10%, driven by lower energy and consumer goods purchases. This dynamic has shifted the trade balance positively despite ongoing global uncertainties.