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شبكة راية الإعلامية
Bank of Israel Cuts Growth Forecasts
The Bank of Israel has lowered its economic growth forecast for 2026 to 4% from the previous 5.2%. The projected deficit has been increased to 4.9% of GDP, with the possibility of rising to 5.5% if the government approves a security budget increase of 25 billion shekels. This comes amid the impacts of the recent war with Iran, with GDP contracting by 3.8% in the first quarter of 2026, and inflation decreasing to 1.9%, despite the shekel appreciating by 10%, alongside a tight labor market and rising wages. The report also noted a reduction in the budget deficit to 3.8% of GDP but warned that potential security expenses could cause it to rise again. Overall, the economy is expected to recover gradually as supply restrictions are eased, though ongoing geopolitical tensions and their effects on economic performance will continue to influence the outlook.
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