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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...

Bank of Israel Governor: Inflation at target midpoint; rate cuts likely once or twice, fiscal policy will push debt higher
ISRAEL · In Brief · 29 Apr 2026

The Governor of the Bank of Israel spoke yesterday at a conference held by the Aaron Institute. He stressed the resilience of the Israeli economy during the recent shocks, as reflected in financial indicators, private consumption data (credit-card spending), and tax revenues. The Governor noted t...

Former Israeli PMs Bennett and Lapid join forces ahead of elections to form the largest party
ISRAEL · In Brief · 27 Apr 2026

In an interesting political development, Yair Lapid, head of the Yesh Atid party and former prime minister, and Naftali Bennett, a former prime minister, have agreed to unite politically ahead of the next elections. Bennett is expected to lead the joint list, with Lapid serving as number two. The...

Imports fell sharply in March amid the war, but the trade deficit widened in Q1, which could eventually lead to upward pressure on the exchange rate
ISRAEL · In Brief · 24 Apr 2026

Foreign trade data for March, which was the first full month of the war, pointed to a sharp contraction in imports, which fell by 12% m/m, although they remained 2% higher y/y. The decline was broad-based: Consumer goods imports dropped by 16%, raw materials by 10%, and investment goods by 22%. I...

Geopolitics remain the main driver, shekel strength deepens; inflation under control - Weekly report, April 21, 2026
ISRAEL · Report · 21 Apr 2026

Key developments and outlook - Geopolitics remains the dominant driver: While the recent ceasefires have reduced immediate risks, uncertainty around a potential U.S.-Iran agreement and the fragile ceasefire in Lebanon could lead to another round of fighting in the coming weeks. - For the ...

Past week review and week ahead: March CPI, budget, and geopolitics in focus - Weekly report, April 13, 2026
ISRAEL · Report · 13 Apr 2026

After nearly two weeks of holiday-related slowdown, economic activity in Israel resumed yesterday, alongside a continued ceasefire and a gradual return to routine. Equity markets responded positively to the cease-fire, with the TA-35 rising by 1.9% and the TA-90 gaining 1.6% in Friday’s session. ...

Past week review and week ahead: macroeconomic and geopolitical developments - Weekly report, April 6, 2026
ISRAEL · Report · 06 Apr 2026

Last week was short due to the Passover holiday, with the main focus on the Bank of Israel's decision to keep rates unchanged at 4.0%. The rate announcement maintains a somewhat hawkish tone due to war and inflation risks. BoI growth forecasts for 2026 were revised down to around 3.8%, although a...

BoI holds rates at 4% with a hawkish tone; growth forecasts downgraded; 2026 budget passes with unrealistic assumptions
ISRAEL · In Brief · 30 Mar 2026

Bank of Israel leaves the policy rate at 4%, with a somewhat hawkish statement The Bank of Israel left the policy rate unchanged at 4.0%, in line with expectations, but we felt that the wording of the statement was clearly hawkish. The bank emphasized, as expected, the increase in geopolitical un...

Interest rates, U.S.-Iran negotiations, and markets in focus: macroeconomic and geopolitical developments - Weekly report, March 27, 2026
ISRAEL · Report · 27 Mar 2026

Headlines: - Israeli markets weakened sharply this week, driven by growing concerns over a potential agreement with Iran. The sell-off intensified today (Friday), with the TA-90 falling by 2.4% and the TA-125 by 3.5%, bringing weekly declines to 5.9% and 5.2%, respectively, and erasing all ga...

Broad unemployment rises due to war-related disruptions, including school closures and business shutdown
ISRAEL · In Brief · 24 Mar 2026

Early data point to the economic impact of the war in Israel.  Yesterday, the CBS published labor market data for February. According to the CBS, the February survey partly covers the first week of March, reflecting the initial impact of the war, including business closures and workers placed on ...

Israel’s economy under war: macroeconomic and geopolitical developments - Weekly report, March 20, 2026
ISRAEL · Report · 20 Mar 2026

Headlines: - Israel struck major energy infrastructure in Iran, including the South Pars gas field, and Iran retaliated by targeting energy facilities in Qatar and Israel, including refineries. At the same time, Iran continues to launch limited, but more advanced missiles, creating repeated dis...

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