ISRAEL
Analyst
Sani Ziv
UN Economic ConsultantRecent Country Insights
Israel’s political crisis and its fiscal implications for 2025–2026
ISRAEL · In Brief · 18 Jul 2025
Prime Minister Netanyahu’s government lost its parliamentary majority this week, after the two ultra-Orthodox parties—Shas and United Torah Judaism—announced their resignation from the government. The move came after the coalition failed to submit a draft law that would exempt most ultra-Orthodox...
Israel's June CPI surprised to the upside: +0.3% m/m, 3.3% y/y - lowering chances of a near-term rate cut
ISRAEL · In Brief · 17 Jul 2025
The June CPI surprised on the upside, rising by 0.3% month-on-month at the upper end of market expectations—and pushing annual inflation up to 3.3%, from 3.1% in May. Food and housing remained the main drivers of the increase, each rising by 0.7% and 0.6%, respectively. Core services also increas...
Israel’s post-war economic outlook: uncertainty eased, risks remain
ISRAEL · Report · 14 Jul 2025
The 12-day war between Israel and Iran ended with significant damage to Iran’s nuclear infrastructure and missile capabilities without escalating into a broader regional conflict. For Israel, the outcome represents a meaningful improvement in its geopolitical standing and a substantial reduction ...
Israel's fiscal deficit holds at 5.0% of GDP in June, but risks remain
ISRAEL · In Brief · 10 Jul 2025 · 1 response
The Ministry of Finance reported a fiscal deficit of NIS 16.4 billion ($4.888 billion) in June, with the trailing 12-month deficit unchanged at 5.0% of GDP. In September 2024, the budget deficit had peaked at 8.5% of GDP. Tax revenues in June were disappointing, falling 6% in real terms and at co...
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...