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- USD49.58+0.05%
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- GOLD4,148.00-0.05%
- INTEREST37.00%-1.00
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- October 22, 202613°
- BIST10011,577-1.87%
- USD49.58+0.05%
- EUR55.62+0.09%
- GOLD4,148.00-0.05%
- INTEREST37.00%-1.00
- BITCOIN84,356+1.71%
- October 22, 202613°
IMF: Israel's 2026 growth forecast dropped to 3.5% amid tensions
The International Monetary Fund (IMF) cut Israel's 2026 growth forecast to 3.5%, citing rising regional tensions that cast a shadow over the economy.
The International Monetary Fund (IMF) Executive Board concluded its Article IV consultation with Israel for 2026. In a statement, the fund said that rising regional tensions in the Middle East cast a shadow over Israel's economy.
Growth forecast lowered
According to the statement, the 2026 growth forecast, which was projected at 4.8% before the war, was lowered to 3.5% due to a sharp contraction in the first quarter and a limited recovery expected for the rest of the year.
Inflation and risks
Despite the appreciation of the shekel, rising energy prices and supply constraints are expected to temporarily push up inflation. Risks to the growth outlook are assessed as downside, while inflation risks are upside. Deeper and more prolonged regional conflicts remain the main source of concern.
Medium-term challenges
The economic repercussions of the conflicts and long-standing labor market challenges are putting pressure on the medium-term outlook. According to the IMF, rebuilding fiscal buffers, boosting labor supply and productivity, and ensuring price and financial stability are listed as key priorities.
Defense spending and labor
In the statement, the expectation was expressed that defense spending will remain high due to ongoing conflicts, and labor supply will remain constrained by military mobilization and reduced access to non-Israeli labor. It was emphasized that these pressures will exacerbate structural challenges, such as low participation rates among certain groups, and slow down the medium-term economic outlook.
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