AAPI Newsletter: April 2023

In March 2023, the Bank of Israel published its Annual Report for 2022, which included a chapter written by economist Haggay Etkes on the growing trade and tourism ties between Israel and countries in the Middle East. Key findings and insights in the report include:
 

• Israel’s trade with the countries of Middle Eastern countries, notably Turkey and the United Arab Emirates, has grown at an accelerated pace since the Abraham Accords. Israel’s imports from the region grew from $3.6 billion (4.7% of total imports) in 2019 to $8.3 billion (7.7% of total imports) in 2022. Israel’s exports to the region increased from $2 billion (3.4% of total exports) to $3.2 billion (4.4% of total exports). It should be noted that these numbers do not include services, including cyber and software, which are Israel’s primary export sector.
• According to the UAE Federal Competitiveness and Statistics Centre, approximately 82% of the UAE’s exports to Israel from January-September 2022 were re-exports (according to the Israeli Central Bureau of Statistics, the percentage is significantly lower). Bank of Israel data shows that these re-exported goods are less expensive than those from China or India (2.6% and 1% less expensive, respectively). Although slightly more expensive than goods from other sources, importing from the geographically closer Abraham Accords member the UAE offers benefits, such as the ability to maintain smaller inventories due to the possibility of a factor replenishment.
• Israel’s export of natural gas to Jordan and Egypt has grown substantially since the signing of the Abraham Accords. In 2020, Israel exported 2.2 BCM of natural gas to Egypt. In 2022, this increased to 6.3 BCM. In 2020, Israel exported 2.1 BCM to Jordan, which increased to 2.9 BCM in 2022. These number are expected to continue to grow over the coming decade.
• Israeli tourism to, and travel via, Middle Eastern countries has also grown substantially in the wake of the Abraham Accords. In 2019, there were approximately 1.345 million arrivals of Israelis to Middle Eastern countries were recorded, growing to 1.851 million in 2022. Around 20% (3.9 million people) of those flying from Israel’s Ben Gurion Airport on international flights in 2022 were headed for a Middle Eastern country (up from 11%, or 2.5 million people, in 2019). The most popular destinations were Turkey, the UAE, Egypt (particularly Sharm El-Sheikh) and Morocco.

Read the full report in English or Hebrew (pages 54-59).

March 2023 Visitor Numbers: (Source: Israel Central Bureau of Statistics)

• 200 Moroccan citizens visited Israel in March 2023, constituting a 50% decrease from March 2022. 1,300 Moroccan citizens have visited Israel so far this year, a 160% increase from the first three months of 2022.
• 100 Egyptian citizens visited Israel in March 2023, constituting a 50% decrease from March 2022. 300 Egyptian citizens have visited Israel so far this year, the same as in the first three months of 2022.
• 1,100 Jordanian citizens visited Israel in March 2023, constituting a 22% increase from March 2022. 3,800 Jordanian citizens have visited Israel so far this year, a 100% increase from the first three months of 2022.

In addition to our regular monthly visitor numbers, the Israeli Central Bureau of Statistics provided AAPI this month with data regarding visits to Israel by citizens of the UAE, Bahrain, Sudan, and Kosovo since 2021. The data reflects a significant increase in inbound tourism to Israel, with the UAE, Bahrain, and Kosovo all having more visitors through the first quarter of 2023 than during all of 2021.
 

March 2023 Trade Numbers: (Source: Israel Central Bureau of Statistics)

• Trade between Israel and the United Arab Emirates reached $316.9 million in March 2023, constituting a 197.56% increase in trade from March 2022. For the first 3 months of 2023, bilateral trade was 783 million, constituting a 62.35% increase in trade from the first 3 months of 2022.
• Trade between Israel and Bahrain reached $1 million in March 2023, constituting a 9.09% decrease in trade from March 2022. For the first 3 months of 2023, bilateral trade was $4 million, constituting a 100% increase in trade from the first 3 months of 2022.
• Trade between Israel and Morocco reached $7.7 million in March 2023, constituting a 148.39% increase in trade from March 2022. For the first 3 months of 2023, bilateral trade was $25.1 million, constituting a 258.57% increase in trade from the first 3 months of 2022.
• Trade between Israel and Egypt reached $27 million in March 2023, constituting a 24.37% decrease in trade from March 2022. For the first 3 months of 2023, bilateral trade was $96.9 million, constituting a 19.33% increase in trade from the first 3 months of 2022.
• Trade between Israel and Jordan reached $41.9 million in March 2023, constituting a 15.18% decrease in trade from March 2022. For the first 3 months of 2023, bilateral trade was $133.5 million, constituting a 6.37% increase in trade from the first 3 months of 2022.

Insights from HVS Consulting:
Research by AAPI partner HVS Consulting illuminates progress made on Israel-UAE tourism relations since the singing of the Abraham Accords:
 

1. Dubai Tourism – Over 85,000 Israelis visited Dubai in the first two months of 2023, a 212% year-over-year increase. Israel has become the fastest growing source tourism market for Dubai and is now its eighth-largest source tourism market overall.
2. Abu Dhabi Tourism – Over 9,000 Israelis checked into Abu Dhabi hotels in the first two months of 2023, an 84% year-over-year increase. Israel has emerged as the eleventh-largest source market for tourism to Abu Dhabi.
3. Direct Flights – The UAE and Israel have agreed to increase the number of direct flights between the two countries, approving the addition of seven regular weekly flights between Tel Aviv and Dubai. With 49 daily flights set to operate between Tel Aviv and Dubai, the Tel Aviv-Dubai flight route now represents the second-most popular daily flight route from Tel Aviv. Emirates Airline will take advantage of this opportunity to operate an additional daily flight from Tel Aviv.