ISRAEL
Analyst
Sani Ziv
UN Economic ConsultantRecent Country Insights
December CPI flat; annual inflation drops to 2.6%, within target after three years above it; The rate-cutting cycle is expected to continue into 2026
ISRAEL · In Brief · 16 Jan 2026
We attach a brief update following last night’s CPI release. A fuller analysis, including our inflation forecasts for 2026–2027, will follow early next week. December CPI flat, in line with expectations; annual inflation eases to 2.6%, within target after three years above it Israel’s consumer pr...
Recent data point to a sustained recovery in economic activity in Q4, alongside cooling consumer confidence
ISRAEL · In Brief · 15 Jan 2026
The Monthly Index of Economic Activity, published by the Bank of Israel, rose 0.3% in December, in line with its long-term growth trend. The index, which reflects the average monthly growth estimate for the period from October to December, suggests that growth in the fourth quarter resumed its ri...
Fiscal deficit in 2025 falls to 4.7%, well below forecast
ISRAEL · In Brief · 14 Jan 2026
Israel’s fiscal deficit narrowed more than expected in 2025, falling to 4.7% of GDP from 6.8% in 2024 and below the original 5.2% target. Nominal government spending rose by 4.8%, while revenues surged by 13.8%. Tax collections surprised on the upside even after accounting for the tax hikes imple...
Macroeconomic and geopolitical developments – Weekly report, January 12, 2026
ISRAEL · Report · 12 Jan 2026
The past week was marked by the Bank of Israel’s rate cut and the market’s reaction to this somewhat unexpected move. This came alongside heightened geopolitical developments, most notably the expanding protests in Iran. While the latter do not yet have a direct impact on Israel’s macro outlook, ...
Business-sector survey signals acceleration in activity toward year-end
ISRAEL · In Brief · 07 Jan 2026
The latest Business Survey for December 2025, which provides the closest local proxy to a PMI and covers both the industrial and services sectors, points to a further acceleration in activity toward year-end. The net balance for current activity rose to 20.88 points from 19.68 in November, althou...
Macroeconomic and geopolitical developments – Weekly report, January 6, 2026
ISRAEL · Report · 06 Jan 2026
The year ends on a calmer note, with Israel’s macro-economic environment improving. Still, it is constrained by tight labor markets, and fiscal uncertainty exists. Domestic demand indicators point to solid fourth-quarter momentum, the shekel remains firm, and risk premia have continued to decline...
Bank of Israel cuts rates for a second time, signals a dovish stance; 2026 growth forecast revised higher
ISRAEL · In Brief · 05 Jan 2026
Contrary to market expectations, the Bank of Israel surprised with a second consecutive rate cut. As we noted yesterday, the prevailing macroeconomic conditions supported further easing, leaving little justification for keeping rates at their current level. The policy statement conveyed a more do...
Interest rate review: Bank of Israel seen holding rates tomorrow, despite our view that there is room for further easing
ISRAEL · In Brief · 04 Jan 2026
The Bank of Israel is scheduled to announce its monetary-policy decision for February tomorrow. The near-market consensus is that the policy rate will remain unchanged, reflecting the Bank of Israel’s concerns over a still-tight labor market (with unemployment at around 3%), the risk of pent-up d...
Gasoline price to drop 3.3% on January 1st, supporting continued monetary easing
ISRAEL · In Brief · 30 Dec 2025
Starting January 1st, the price of gasoline in Israel will be reduced to NIS 6.85 per liter. The decline reflects a 10.76% drop in global oil prices and a 2.26% appreciation in the shekel-dollar exchange rate. The 3.66% decline in fuel prices points to a particularly low CPI reading in January, i...