ISRAEL
Analyst
Sani Ziv
UN Economic ConsultantRecent Country Insights
Bank of Israel holds rates; future easing less likely as Gaza operation gets underway
ISRAEL · In Brief · 20 Aug 2025
As we expected, the Bank of Israel kept the benchmark rate unchanged at 4.5% yesterday, for the 13th consecutive meeting. The tone was cautious and hawkish, with emphasis on inflation risks, geopolitical uncertainty, and a tight labor market. The bank also mentioned signs of a rapid recovery afte...
Bank of Israel expected to hold rates tomorrow; window for Q4 easing exists
ISRAEL · In Brief · 19 Aug 2025
The Bank of Israel is expected to announce its key policy rate decision tomorrow (Wednesday, August 20). We do not expect a rate cut at this meeting. Why wait: Headline inflation has eased but remains above the 3% upper bound. The BoI continues to warn of labor-supply-driven price pressures, incl...
Sharp drop in GDP in Q2 not only due to the war with Iran; Gaza war poses growth risks ahead
ISRAEL · In Brief · 18 Aug 2025 · 1 response
Preliminary data for Q2 GDP show an annualized contraction of about 3.5%. The decline reflects the impact of the Israel-Iran war at the end of the quarter, which led to a partial shutdown of the economy in the last two weeks of June. Compared to a year earlier, GDP increased by 1.6%, but relative...
July print analysis: housing and seasonality pushed inflation up; the shekel offset some of the pressure
ISRAEL · In Brief · 18 Aug 2025
July’s CPI rose 0.4% m/m in line with our expectations, leaving headline inflation at 3.1% y/y, still slightly above the target range of the central bank (1%-3%). The print was a classic summer seasonal mix: Airfares increased 11% and domestic holidays 6.6%, both pushing up the index, while cloth...
July CPI preview: inflation to remain above target, Gaza operation endangers rate-cut prospects
ISRAEL · In Brief · 14 Aug 2025
Tomorrow (Friday) we will get July’s CPI print, and we will be watching it closely. We expect a 0.3%-0.4% monthly increase, which would keep annual inflation at around 3.1%, still above the Bank of Israel’s 1%-3% target range. July is typically a low-to-moderate CPI month, with an average monthly...
Israel’s July fiscal data: deficit narrows, but risks rise from Gaza takeover plan
ISRAEL · In Brief · 11 Aug 2025
The Ministry of Finance reported a fiscal deficit of NIS 4.7 billion ($1.4 billion) in July, with the trailing 12-month deficit narrowing to 4.8% of GDP from 5% in June. The budget deficit peaked at 8.5% of GDP in September 2024. Tax revenues in July totaled NIS 46.4 billion and reached NIS 306 b...
Foreigners were the dominant segment supporting shekel appreciation in Q2
ISRAEL · In Brief · 06 Aug 2025
The Israeli shekel appreciated significantly in Q2 2025, gaining approximately 9.3% against the US dollar and 1.5% against the euro, driven by improved investor sentiment following Operation “Am KeLavi” and broad-based dollar weakness in global markets. The shekel also strengthened by 6% in effec...
Israeli geopolitics: August 2025—dangerous stalemates on all fronts
ISRAEL · Report · 05 Aug 2025
Key takeaways from this report: Gaza ceasefire talks remain stalled: Negotiations between Israel and Hamas have collapsed over core disputes, including the extent of Israeli withdrawal, a commitment to ending the war, and the scope of prisoner exchanges. Efforts by mediators continue, but no b...
Wage growth slows in Israel in June; real wages continue to decline
ISRAEL · In Brief · 04 Aug 2025 · 1 response
The average nominal wage for all workers increased by 2.1% over the past year (based on original data through June), and by 2.5% among Israeli workers only. When seasonally adjusted, wages likely rose at a rate of about 3%, which is still considered relatively low (below the increase of inflation...