ISRAEL
Analyst
Jonathan Katz
Former Chief Economist, Finance Ministry Budget DepartmentRecent Country Insights
Rate stability expected due to high inflation
ISRAEL · In Brief · 15 May 2024
April’s CPI surprises on the upside Inflation in April was up 0.8% (consensus and my forecast were at 0.6%) and accelerated to 2.8% y/y from 2.7% last month. Core inflation accelerated to 2.4% y/y from 2.3%, but excluding government measures (cigarette tax hike), core inflation was up only 2.1%. ...
Fiscal deficit expands on rapid expenditure growth
ISRAEL · In Brief · 10 May 2024
The fiscal deficit in the LTM rose to 7% GDP in April from 6.2% in March, but excluding the seasonal delay in revenues, the deficit stands at 6.7%. Spending is up 36% y/y in Jan-April while revenues are down 2.2% (nominal). We note that expenditure not related to the war is up 11.7%, which we see...
Israeli institutions sold FX in Q1 as global markets pushed higher
ISRAEL · In Brief · 09 May 2024
In Q1, Israeli institutional investors sold net $5.3 billion, following purchases of a similar volume in Q4. Sales in the first quarter derived mainly from sharp increases in global capital markets and not really due to optimism about the geopolitical environment. As of February, the rate of expo...
Increasing indications of slowing growth
ISRAEL · Report · 06 May 2024
1. Economic indicators appear mixed, with signs of slowing growth ahead. 2. We continue to expect inflation to accelerate, limiting the possibility of monetary easing. 3. The shekel continues to fluctuate on shifting expectations regarding a possible cease-fire.
Signs of slowing growth; growth pessimism regarding a cease-fire
ISRAEL · In Brief · 06 May 2024
Geopolitics: Expectations regarding a possible cease-fire continue to shift from some optimism to recently more pessimism, as Netanyahu refuses to agree to the end of the operation and total withdrawal from Gaza. Israel is preparing for an operation in Rafah, or at least pressure Hamas to agree t...
Inflation expected to accelerate
ISRAEL · Report · 22 Apr 2024
Inflation in March (0.6% m/m 2.7% y/y, following 2.5% last month) was slightly above expectations of 0.5% on average. Core inflation inched up to 2.3% y/y from 2.2% last month but this is due to higher taxation on cigarettes, which contributed 0.17% to the CPI. Core excluding government measure r...
Inflation in March slightly above expectations, but core remains low
ISRAEL · In Brief · 15 Apr 2024
Inflation in March slightly above expectations Inflation in March (0.6% m/m 2.7% y/y, following 2.5% last month) was slightly above expectations of 0.5% on average. Core inflation inched up to 2.3% y/y from 2.2% last month but this is due to higher taxation on cigarettes contributing 0.1% to the ...
Markets shrug off escalation
ISRAEL · Report · 15 Apr 2024
1. So far, markets appeared unfazed by the recent Iranian strike on Israel, including the equity, bond and FX markets. 2. The BoI kept rates unchanged at its most recent meeting due to current elevated geopolitical risks, but expects easing in the coming year. 3. The economy has recovered...
Local markets shrug off recent Iranian missile attack
ISRAEL · In Brief · 15 Apr 2024
Geopolitics: Iran launched a large-scale drone/cruise/missile attack on Israel Saturday night. Some 200 projectiles were fired, 99% were intercepted. Israel’s defense system performed exceptionally well, in addition to cooperation with other allies including the US, UK, and Jordan. The big questi...