Israel Economic Forecast

Israel Economic Outlook

November 3, 2020

The latest data suggests tepid activity in the third quarter. The State of the Economy Index declined in July and only recorded mild rises in August and September. Moreover, September’s reading—which is calculated in part using backward-looking data for August—likely does not fully incorporate the impact of the second nationwide lockdown in place from mid-September. Looking to the fourth quarter, while the lockdown was eased somewhat in mid-October, remaining restrictions will still be severely curtailing the services sector. In politics, disagreement between Prime Minister Netanyahu and his coalition partner Benny Gantz over the budget process has raised political uncertainty and is hampering the government’s response to the Covid-19 crisis. If a budget for the current year is not passed by 23 December, fresh elections will be triggered, which could further increase instability.

Israel Economic Growth

Economic output will tumble this year due to the double lockdown. However, the economy should rebound next year amid the likely lifting of restrictions and strong gas exports. Downside risks include volatile regional geopolitics, political instability amid a fractured parliament, and a potential prolongation of Covid-19 restrictions. FocusEconomics analysts estimate the economy expanding 4.2% in 2021, up 0.1 percentage points from last month’s forecast, before growing 4.2% in 2022.

Israel Economy Data

2015 2016 2017 2018 2019
Population (million)
GDP per capita (USD)35,79037,35040,56341,67443,658
GDP (USD bn)300319353370395
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
Unemployment Rate5.
Fiscal Balance (% of GDP)-2.1-2.1-2.0-2.9-3.7
Public Debt (% of GDP)63.861.859.960.459.6
Inflation Rate (CPI, annual variation in %, eop)-1.0-
Inflation Rate (CPI, annual variation in %)-0.6-
Policy Interest Rate (%)
Exchange Rate (vs USD)3.903.853.473.753.46
Exchange Rate (vs USD, aop)3.893.843.603.603.56
Current Account (% of GDP)
Current Account Balance (USD bn)15.511.48.39.514.3
Trade Balance (USD billion)-3.4-8.3-11.4-18.3-16.9
Exports (USD billion)57.155.657.258.959.0
Imports (USD billion)60.563.968.577.175.9
Exports (annual variation in %)-9.6-
Imports (annual variation in %)-
International Reserves (USD)90.698.4113115126
External Debt (% of GDP)28.727.325.125.326.2

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Israel Facts

Value Change Date
Bond Yield0.98-1.69 %Jan 01
Exchange Rate3.46-0.37 %Dec 31

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