ISRAEL
Analyst
Sani Ziv
UN Economic ConsultantRecent Country Insights
The rate decision – July 7, 2025: no cut, hawkish tone, but 50bp expected no later than Q4 2025
ISRAEL · In Brief · 07 Jul 2025 · 1 response
The central bank of Israel kept its benchmark interest rate unchanged at 4.5% on July 7th, for the twelfth consecutive meeting. The decision was largely in line with expectations, even though a growing number of economists and market participants had anticipated a signal toward monetary easing.De...
Bank of Israel likely to hold rates steady, but easing expected in upcoming meetings, possibly as early as August
ISRAEL · In Brief · 07 Jul 2025
The Bank of Israel is expected to announce its key policy rate decision today (Monday, July 7). While we do not expect a rate cut at this meeting, there is a growing consensus that easing could begin as early as August. The sharp appreciation of the shekel (up ~9% since mid-April), a notable decl...
Shekel strength supported by fundamentals but may reflect short-term overshooting
ISRAEL · In Brief · 26 Jun 2025
Since the successful military operation against Iran, the shekel has strengthened by nearly 4.5% against the U.S. dollar, reaching its strongest level since the end of 2022. It has also been appreciated by 4.5% against the euro. Chart 1: ILS exchange rate vs USD, EUR, and nominal effective rate T...
Post-ceasefire economic update: recovery, risk, and resilience
ISRAEL · In Brief · 24 Jun 2025
After twelve days of fighting, during which the United States joined the attack on Iran’s nuclear facilities, a ceasefire came into effect that is likely to end the war. The war concluded with significant damage to Iran’s nuclear infrastructure and missile systems, without deteriorating into a br...
Israel’s economy at war: macro scenario amid the war with Iran
ISRAEL · Report · 18 Jun 2025
A conflict lasting several weeks is expected to cause a moderate contraction in GDP in Q2 and Q3 2025. Annual growth is projected to slow to just 0.3%. The fiscal deficit is expected to widen to 7% of GDP, driven by surging defense spending and a drop in tax revenues—pushing the debt-to-GDP rati...
Are financial markets in Israel predicting a near end to the war?
ISRAEL · In Brief · 17 Jun 2025
The Tel Aviv Stock Exchange extended its gains today, following Sunday’s 5.1% surge, with the TA-90 Index rising a further 0.82%. The advance came as Israeli military operations in Iran continued to progress, while rocket fire from Iran appeared to subside. Investor sentiment was further lifted b...
May CPI surprised to the downside, but inflation remains near 3% – rate cut unlikely due to geopolitical risks
ISRAEL · In Brief · 16 Jun 2025
May CPI surprises with a 0.3% drop, driven by a sharp fall in prices for trips abroad May CPI in Israel surprised to the downside, falling 0.3% month-on-month, driven primarily by a sharp 15.5% drop in overseas travel prices. This brought the annual inflation rate down to 3.1%, from 3.6% in April...
Israel’s war economy – economic outlook following the Iran strike
ISRAEL · In Brief · 14 Jun 2025
On June 13, 2025, Israel launched a major military operation inside Iranian territory, targeting nuclear sites, missile launch infrastructure, and senior military command centers. The strikes caused significant damage and reportedly killed several high-ranking Iranian officials and military offic...
Israel’s budget deficit narrowed to 5.0% of GDP in May; Stronger-than-planned tax revenues may offset above-budget defense spending, assuming Gaza de-escalation by Q3
ISRAEL · In Brief · 11 Jun 2025
The Ministry of Finance released the May budget figures yesterday, and overall, the data looks solid—even though we’re still operating in a high-expenditure environment. The fiscal deficit for May came in at NIS 8.6 billion (~$2.5 billion), with the trailing 12-month deficit edging down slightly ...