The CA surplus is expected to increase in 2019-2020

ISRAEL - Report 14 Jan 2019 by Jonathan Katz

The CA surplus is expected to increase in 2019-2020 on the back of strong exports of natural gas and electronic components, supportive of a strong shekel. The new BoI Governor appears to be in the dovish camp, stressing that rate hikes will depend on an acceleration of inflation. We current expect inflation to reach 1.1% in 2019 with only one rate hike. Politics: The likely indictment of PM Netanyahu will make coalition formation problematic following the elections.

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