ISRAEL
Analyst
Sani Ziv
UN Economic ConsultantRecent Country Insights
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%)...
Israel moves closer to early elections; election date expected next week
ISRAEL · In Brief · 13 May 2026
Coalition Whip Ofir Katz submitted a bill on Wednesday to dissolve the 25th Knesset, joined by the heads of all coalition factions, after ultra-Orthodox parties announced, they would work to bring down the government. The announcement reflects growing frustration among ultra-Orthodox parties over...
Budget deficit narrows in April on stronger-than-expected tax revenues
ISRAEL · In Brief · 12 May 2026
The budget deficit over the past 12 months narrowed to 3.8% of the GDP in April, down from 4.2% in March and 4.7% in February. The better-than-expected figure was driven by stronger tax revenues, which rose by 5% year-on-year in real terms. Direct and indirect tax revenues both increased by aroun...
Weekly report, May 11, 2026: Iran rejects ceasefire proposal; Israeli politics heats up, while markets focus on April CPI, the shekel, and the upcoming rate decision
ISRAEL · Report · 11 May 2026
Key developments and outlook: - Iran rejected the U.S. proposal to end the war: Israel assassinated a senior Hezbollah commander in Beirut, while fighting in southern Lebanon and exchanges of fire in the Gulf region continue. A diplomatic settlement appears unlikely in the near term, with the...
Israeli institutional FX sales drive shekel weakness
ISRAEL · In Brief · 05 May 2026
Israeli institutional investors sold $5.2 billion in the first quarter of 2026, following sales of about $13 billion in the fourth quarter of 2025. These data are consistent with a reduction in their dollar exposure, mainly through increased hedging and adjustments to rising U.S. equity markets, ...
Private consumption declined sharply in March and partially recovered in April; high-tech services exports remain strong
ISRAEL · In Brief · 04 May 2026
Private consumption declines in March, recovery expected to be gradual Credit card purchases fell by 11.9% in March (real terms, seasonally adjusted), reflecting the disruption to economic activity caused by the war. By comparison, during Operation “Rising Lion” in June 2025, purchases declined b...
Weekly report, May 1, 2026: Israeli politics heats up toward elections, while the shekel strengthens despite geopolitical and economic risks
ISRAEL · Report · 01 May 2026
Key developments and outlook: - Geopolitics: U.S.–Iran negotiations remain stalled, while fighting in Lebanon is gradually intensifying, increasing the likelihood of another round of fighting. - Politics: Former Prime Minister Naftali Bennett and opposition leader Yair Lapid announced a joi...