Israel Economic Forecast

Israel Economic Outlook

October 6, 2020

Economic conditions appeared muted in Q3 following a record contraction in Q2. The State of the Economy Index declined in July and August, likely held back by the reimposition of some restrictions following rising new cases. In addition, merchandise exports were down sharply in the same period on still-tepid demand abroad. Moreover, the government reimposed a full-scale nationwide lockdown on 18 September as Covid-19 cases continued to surge, which likely hit the services sector particularly hard and pummeled the economy towards the end of the quarter. Non-essential businesses and schools have been closed, with citizens ordered to stay within 500 meters of their homes. However, people are still allowed to travel to work if their business is considered essential, which includes the banking, energy and construction sectors, and some manufacturing sites.

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 see the economy shrinking 5.6% in 2020, before growing 4.1% in 2021, which is down 0.6 percentage points from last month’s forecast.

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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