Country Analysts

Jonathan Katz
Former Chief Economist, Finance Ministry Budget Department

Recent Country Insights

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The CA surplus is expected to increase in 2019-2020
ISRAEL - Report 14 Jan 2019
Highlights: According to the BoI forecast, the CA surplus is expected to improve significantly. Exports are expected to expand by 5.5% in 2019 and 6% in 2020.This is due to the expected sharp growth of Intel exports and natural gas exports from the Leviathan gas field, as well as slowing import g...

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The bond market will react to the BoI macro forecast for 2019-2020
ISRAEL - Report 07 Jan 2019
Highlights: GDP growth reached 3.2% in 2018 (first CBS estimate). This is 0.5% below the BoI forecast from October 2018.Growth in 2018 was fairly balanced: 4.1% in PC, 4.0% in public consumption, 4.0% in exports and 2.7% in investments.Growth excluding taxes on imports reached 3.1%, following 3.9...

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Fiscal consolidation expected following the elections, including tax hikes
ISRAEL - Report 31 Dec 2018
Highlights: Recent PC indicators point to some PC acceleration in Q418. Credit card purchases increased by 9.8% saar in Sept-Nov.Chain store sales increased by 1.7% in Sept-Nov, following -0.2% in the previous three months.Households are enjoying wage growth and full employment.On the other hand,...

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Low inflation and elevated global risks support rate stability in January
ISRAEL - Report 24 Dec 2018
Residential completions accelerate in 2018, while starts slow Residential completions accelerated in 2018. In the first 9 months of the year completions reached an annual level of 50.3k compared to 48.3k in 2017 and 46.1k in 2016. We expect total residential completions to approach 51k units this...

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Inflation expectations move higher on planned price hikes and weaker shekel
ISRAEL - Report 17 Dec 2018
Highlights: November's CPI (-0.3% m/m) came in slightly lower than consensus. Housing (rental prices) are up 2.1% y/y, contributing 0.5% to inflation.Core inflation moderated to 0.8% y/y from 0.97% last month. We expect inflation to reach 1.1% NTM and 1.3% in 2019, assuming a slightly weaker shek...

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The FX market likely to react to lower CA surplus in Q3
ISRAEL - Report 10 Dec 2018
Highlights: Average wages increased by 4.4% y/y in September. Wage pressure is due to a tight labor market and the 6% minimum wage hike in Dec 2017.Wage growth is pronounced in the IT/communication, hotel/accommodation and management/support sectors.Wage growth is supportive of some inflationary ...

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Following last week's hike, tightening path expected to be gradual
ISRAEL - Report 03 Dec 2018
Highlights: The market was surprised by last week's hike (but this was our call), although data was mostly rate-hike supportive: Inflation appears entrenched at the lower end of the target.Growth is decent and in line with Israel's long-term growth potential.The labor market remains tight, and wa...

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We expect a rate hike today, against market expectations
ISRAEL - Report 26 Nov 2018
Highlights:Recent data points to fairly steady growthinto early Q418, and a tight labor market:Unemployment in October remained stable at 4.1% (as in September)Unemployment in the 25-64 age group was steady at 3.6%.Job growth appears to be slowing, while job vacancies increase.This is a sign of a...

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A rate hike in November remains a real possibility
ISRAEL - Report 19 Nov 2018
Highlights: Inflation surprised slightly on the upside in October (0.3% m/m, 1.2% y/y). Core inflation accelerated to 0.97% y/y in October from 0.82% in September.Part of the inflation surprise was due to higher-than-expected clothing prices, which are likely to moderate in coming months.Housing ...