The spike in inflation expectations is less justified in Israel

ISRAEL - Report 08 Mar 2021 by Jonathan Katz

* Private consumption is set to accelerate as the economy has opened up significantly.

* The fiscal deficit reached 12.4% of GDP; we expect a lower deficit of 8.5% by year-end.

* Inflation expectations (as reflected in the bond market) have moved higher, but we think the inflation environment will remain relatively low.

* Politics: With two weeks to elections much uncertainty remains regarding the next coalition; the Yemina party is poised to have the decisive say.

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