ISRAEL
Analyst
Jonathan Katz
Former Chief Economist, Finance Ministry Budget DepartmentRecent Country Insights
Robust CA surplus and FDI remain shekel supportive
ISRAEL · Report · 23 Dec 2024
1. Both the current account surplus and FDI remained robust in Q3, supportive of the shekel. 2. Residential investments increased in Q3, but completions are still below the current demand. 3. We maintain our forecast of 2.4% inflation NTM (lower end of consensus), and three rate cuts in 2...
External fundamentals remain robust and shekel supportive
ISRAEL · In Brief · 22 Dec 2024
Geopolitics: Israel’s geopolitical situation has greatly improved, following the ceasefire in Lebanon (still holding), the end of the Assad regime (breaking the flow of armaments from Iran to Hezbollah), and the weakening of Iran in the region (having lost an important ally in Syria). Nevertheles...
Strong fundamentals (CA surplus and FDI) remain shekel supportive
ISRAEL · In Brief · 17 Dec 2024
The current account improved in the 3rd quarter of 2024 reaching 5.5bn USD (SA) from 4.9bn in the previous quarter and 5.6bn in the 1st quarter. The net trade/service balance increased to 5.0bn from 4.2bn. Foreign direct investments in Israel reached 5.6bn in Q3 from 6.3bn in Q2. Portfolio invest...
Downside inflation surprise but rental prices accelerate
ISRAEL · Report · 16 Dec 2024
1. November’s downward inflation surprise is expected to increase the likelihood of a first rate hike in early Q2 2025 (or possibly end-Q1 2025). 2. Inflation in 2025 will be mostly due to the government's fiscal adjustments, while easing supply constraints and a strong shekel will push inflat...
Low inflation in November, but rental prices accelerate
ISRAEL · In Brief · 16 Dec 2024
Geopolitics: Israel’s geopolitical situation has greatly improved, following the ceasefire in Lebanon, the end of the Assad regime (breaking the flow of armaments from Iran to Hezbollah), and the weakening of Iran in the region (having lost an important ally in Syria). Focus is now turning to pre...
Cautious geopolitical optimism fuels markets
ISRAEL · Report · 09 Dec 2024
1. Cautious geopolitical optimism continues to fuel Israeli markets. 2. The business sector is reporting a modest acceleration in activity. 3. Low inflation expectations following January’s CPI print will support a rate cut in April 2025 and three cuts in all of 2025.
Israel’s risk premium continues to decline
ISRAEL · In Brief · 08 Dec 2024
Geopolitics: There has been some good news on several fronts, but uncertainty remains elevated. Firstly, the ceasefire in the North is holding up, nearly two weeks after implementation. Secondly, ceasefire negotiations appear to be more tangible with Hamas (although we have been there before). Th...
De-escalation is deflationary
ISRAEL · Report · 02 Dec 2024
1. The ceasefire in the North will help moderate inflationary pressure. 2. This will support monetary easing commencing in Q2 2025. 3. Recent economic indicators point to deceleration due to the escalation in the North. 4. The MPC expressed satisfaction with the fiscal framework for 2025.
Slowing inflationary pressures likely to support monetary loosening
ISRAEL · In Brief · 01 Dec 2024
Geopolitics: Finally, some good news. The ceasefire with Hezbollah seems to be holding, despite some Israeli attacks due to Hezbollah violations. It is still difficult to assess the likelihood of calm being maintained, but we think so, as the war in Syria will take precedence for Hezbollah and Ir...