Next week in focus: February CPI, the 2026 state budget, and the third week of the war

ISRAEL - Report 13 Mar 2026 by Sani Ziv

Next week we focus on three closely linked developments: the war with Iran as it enters its third week, the February CPI to be released on Sunday, and the progress of the 2026 state budget. We estimate that the February CPI will rise by about 0.1%, still reflecting economic conditions prior to the war. At the same time, the government approved the 2026 state budget this week, including higher defense spending, although the budget must still pass the Knesset by the end of March. Failure to approve the budget by March 31 would automatically dissolve the Knesset and trigger new elections under Israeli law. Political resistance from the ultra-Orthodox parties appears to have eased for now in light of the war.

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