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Macro - Country Economic Forecasts - Israel

Publisher Oxford Economics
Published Oct 30, 2025
Length 8 Pages
SKU # OFE20535908

Description

We raised our GDP growth forecasts for Israel by 0.5ppts to 4% in 2026 and 0.9ppts to 3.5% in 2026. Our forecast for a resurgence in momentum over the next couple of years primarily reflects strong economic fundamentals reasserting themselves as the war with Hamas eases. This should herald a reduction in supply constraints, softer inflation, lower borrowing costs, and a pickup in domestic demand. Together, these forces should more than offset the impact of tighter fiscal policy and the drag from higher US tariffs.

Table of Contents

8 Pages
Israel: Fragile ceasefire remains only an upside risk
Forecast overview
Recent developments
Short-term outlook
Key drivers of our short-term forecast
Economic risk
Economic risk evaluation
Risk warnings
What to watch out for
Exposure to key global risks
Long-term prospects
Alternative long-run scenarios
Background
Economic development
Structure of the economy
Balance of payments and structure of trade
Policy
Politics

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