ISRAEL
Analyst
Sani Ziv
UN Economic ConsultantRecent Country Insights
Budget deficit remains stable in May despite the war; stronger tax revenues support fiscal outlook
ISRAEL · In Brief · 10 Jun 2026
Israel's fiscal deficit remained broadly unchanged in May at 3.8% of GDP (more precisely, 3.75%), equivalent to approximately NIS 81 billion. The monthly deficit in May totaled NIS 8.3 billion, broadly similar to the deficit recorded in May 2025. Overall, the fiscal data remain favorable for the ...
Weekly report, June 8, 2026: Bank of Israel signals faster rate cuts, shekel reverses course, elections likely in October, Iran-Israel tensions escalate again
ISRAEL · Report · 08 Jun 2026
Key developments and outlook: - The war between Iran and Israel resumed following an Iranian attack on northern Israel and an Israeli response targeting sites in Iran. The United States is attempting to contain the conflict in order to preserve momentum in the negotiations with Iran. - Isra...
High-tech sector continues to drive shekel strength and economic growth
ISRAEL · In Brief · 01 Jun 2026
If we seek to understand the sources of the substantial foreign-currency inflows into Israel and the factors underlying the exceptional appreciation of the shekel, the recently published data on high-tech services exports and capital raised by Israeli start-up companies provide an important part ...
Weekly report, May 29, 2026: Bank of Israel cuts rates, the shekel strengthens further, and the U.S.-Iran deal is still being negotiated
ISRAEL · Report · 29 May 2026
Key developments and outlook: - Negotiations between the United States and Iran continued this week, although President Trump stated that “there is no agreement at the moment” and that the U.S. remains dissatisfied with the talks. - According to reports, the agreement will include restricti...
The Bank of Israel cuts interest rate by 25 basis points, maintains hawkish tone
ISRAEL · In Brief · 25 May 2026
The Bank of Israel yesterday lowered its benchmark interest rate by 25 basis points to 3.75%, following previous rate cuts in December 2025 and January 2026. The move was widely expected by the markets and most forecasters. The chart shows the Bank of Israel’s policy rate, which was reduced in De...
Bank of Israel rate decision on Monday in focus amid Iran tensions and stronger shekel
ISRAEL · In Brief · 22 May 2026
The Bank of Israel will announce its interest-rate decision on Monday. Financial markets are currently pricing in around a 60% probability of a rate cut. The case for a rate cut is evident and is supported by the relatively moderate inflation environment (1.9% y-o-y, with core inflation at 1.5%)...
Weekly report, May 18, 2026: Early elections move closer, April CPI in line, and Q1 GDP better than expected; market focus shifts to the Bank of Israel rate decision
ISRAEL · Report · 18 May 2026
Key developments and outlook: - The main political development this week was the growing likelihood of early Knesset elections in September, after coalition parties submitted a bill to dissolve the Knesset amid rising dissatisfaction among ultra-Orthodox parties over delays in military conscr...
Israel’s Q1 2026 GDP declined by 3.3% annualized, reflecting a temporary war shock; output gap remains significant
ISRAEL · In Brief · 18 May 2026
Israel’s preliminary GDP estimate for the first quarter of 2026, published on Sunday, showed a contraction of 3.3% at an annualized rate, equivalent to roughly NIS 3.7 billion in lost output. The decline mainly reflected the sharp slowdown in economic activity during March, particularly its first...
April CPI in line with expectations; strong shekel supports low inflation environment and rate-cut expectations
ISRAEL · In Brief · 18 May 2026
Israel’s CPI rose by 1.2% in April, in line with our expectations. Annual inflation remained around 1.9%, similar to the previous month. Overall, the CPI did not surprise, and the entire increase was driven by higher fuel prices (12.7%) and seasonal components, including prices of airfare (27.9%)...