Israel's year-long war is at a critical moment. At the end of September, Israeli forces launched a ground invasion of Lebanon following the recent assassinations of Hezbollah's leaders. Iran responded by launching a direct missile attack on Israel. Given the gravity of the situation, we downgraded Israel's GDP forecast for 2024 to 1.1% from 1.5%. Consumption and fixed investment were downgraded for Q4 while government spending is set to rise to cover the increase in military spending.
Israel: Israel's war with Iran and Hezbollah intensifies