Israel Economic Outlook
November 3, 2020The 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 GrowthEconomic 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.
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|Bond Yield||0.98||-1.69 %||Jan 01|
|Exchange Rate||3.46||-0.37 %||Dec 31|
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Israel Economic News
March 25, 2021
The Purchasing Managers’ Index (PMI), produced by Bank Hapoalim and the Israeli Purchasing & Logistics Managers Association (IPLMA), dipped from 49.5 in January to 49.4 in February, remaining below the neutral 50-mark and signaling worsening operating conditions.
March 24, 2021
The Bank of Israel’s Composite State of the Economy Index rose 0.40% month-on-month in seasonally-adjusted terms in February (January: -0.26% mom), supported by the easing of the third lockdown.
March 15, 2021
Consumer prices rose 0.30% from the previous month in February, swinging from January's 0.10% fall.
March 11, 2021
Merchandise exports sank 17.5% in annual terms in February, following January’s 1.0% decrease.
Israel: Right-wing parties to emerge fortified following elections, but composition of next government unclear
March 4, 2021
Israel will hold general elections—the fourth in two years—on 23 March 2021, after the dissolution of the Knesset in December due to the failure to pass a budget in time.