Financial statements from 2024 reveal a surprising trend: Israeli businesses not only weathered the war but thrived. As Mizrahi Tefahot Bank CEO Moshe Lari observed, “We are seeing records in revenue, profitability, yield, and dividend distribution across banking, insurance, retail, and real estate. It’s as if we’ve normalized the chaos.”

A key factor behind this resilience was the state’s injection of NIS 20 billion into the economy, with 75% funneled into consumer spending. According to the Bank of Israel, private consumption grew by 5.4% at the end of 2024 compared to pre-war levels. Despite expectations of economic stagnation, tax revenues exceeded forecasts, reaching over NIS 455 billion.

Food retailers saw operating profits soar by 58%, reaching NIS 1.9 billion, fueled by price hikes and increased domestic spending. “People stayed in Israel longer and bought more,” noted industry expert Uri Bartov. The disruptions in global supply chains allowed local manufacturers to capitalize on limited imports, further driving profits. Fashion retailers also saw a surge, with sales at leading brands jumping 15%. Consumers, unable to travel abroad, redirected spending to local brands. Castro led the industry with a 19% sales increase, and its stock price soared by over 150%.

The insurance industry doubled its profits, reaching NIS 6.4 billion across Israel’s five largest firms. Concerns about war-related claims were offset by state compensation programs and stock market gains. “The low unemployment rate and the market’s overall rise supported insurance profits,” explained Lior Yochafez, Deputy CEO of Menora Mivtachim.

Israeli banks thrived amid high interest rates, collectively earning NIS 30 billion—up 17% from the previous year. “The interest rate environment remained elevated due to war-related risks, benefiting banks through high credit spreads,” said Clal Insurance’s Uri Bartov. Bank stocks surged by over 40% in 2024, contributing to record highs in the Tel Aviv Stock Exchange. With Israelis spending more domestically, credit card transactions soared to NIS 563 billion, a 12% increase. Generous government grants and flexible payment plans encouraged higher credit usage, driving profits for Isracard, Cal, and Max.

Despite labor shortages and extended construction timelines, Israel’s real estate sector flourished. Sales of new apartments surged by 144%, supported by aggressive 20/80 financing deals. “The housing market always finds a way to recover and grow stronger,” noted Sigma-Clarity’s Yair Shani. However, recent regulatory measures limiting contractor financing may temper future growth. With international travel curtailed, Israeli shopping malls saw increased foot traffic and spending. Revenue for Azrieli, Melisron, and Big increased by 13%, driven by a shift in consumer behavior. “Malls gained from Israelis staying put and redirecting entertainment budgets locally,” noted investment analyst Yaniv Pagot.

While parts of the economy faced difficulties, the largest and most influential corporations thrived. The war led to increased government spending, supply chain disruptions that favored domestic producers, and shifts in consumer behavior that boosted demand for local goods and services. The unexpected outcome of 2024 has demonstrated the resilience of Israel’s economic infrastructure and its ability to adapt in times of national crisis.

Image credit: Freepik

<p>The post Surpassing Expectations: How Israeli Companies Beat Every Prediction first appeared on Isranomics.</p>

According to intelligence analyses, as early as 2021, Hamas intensified its outreach to Iran, seeking financial and strategic support for a large-scale offensive aimed at delivering what it described as a decisive blow to Israel. In the two years preceding the war, discussions among members of the so-called “radical axis” revolved around orchestrating a coordinated multi-front assault. While this plan ultimately did not materialize in full, Hamas’ attack on October 7 caught Israeli intelligence off guard, highlighting a severe lapse in threat assessment.

Excerpt from Hamas document titled “The Movement’s Strategy 2013-2017,” undated. (The Meir Amit Intelligence and Terrorism Information Center)

Last week, a comprehensive analysis of these captured documents was published by the Intelligence Heritage and Commemoration Center, a research institute working closely with Israel’s intelligence community. The report was authored by Dr. Uri Rost, a researcher and lecturer at Sapir College.

Rost’s findings suggest that since its founding in 1987, Hamas has consistently viewed Israel’s existence as illegitimate. However, until recent years, the group saw Israel’s destruction as a long-term objective rather than an immediate goal. Following the 2021 Guardian of the Walls operation, Hamas leadership began to believe that Israel’s downfall was within reach, marking a significant shift in strategy. This shift was evident in both public statements by Hamas officials and private communications documented in the seized files.

Image credit: www.internationalaffairs.org.au

One of the most striking revelations in the documents is Hamas’ coordination with Iran and Hezbollah. The group’s leader in Gaza, Yahya Sinwar, reportedly considered Israel’s destruction a viable short-term goal, reinforced by the belief that Israel was strategically weak. This perspective was echoed in secret exchanges between Hamas and its allies, including Iranian and Hezbollah officials, who debated the feasibility of a full-scale regional war.

Iran and Hezbollah’s Role in the Planning

The documents confirm that Hamas’ leadership held extensive discussions with Iranian and Hezbollah officials regarding a coordinated attack on Israel. In June 2021, senior Hamas officials sent a letter to Esmail Qaani, commander of Iran’s Quds Force, requesting $500 million in funding over two years to prepare for what they termed a “liberation war” against Israel. The letter, which was also addressed to Iran’s Supreme Leader Ali Khamenei, stated that Israel was weaker than perceived and could be eradicated with sufficient external support.

By July 2022, Hamas’ external leadership in Qatar intensified coordination efforts. Sinwar reportedly sent an urgent letter to Hamas’ political chief Ismail Haniyeh, urging him to travel to Iran to advance plans for a military buildup in southern Lebanon. Later, in a secret meeting with Hezbollah leader Hassan Nasrallah, Hamas leaders presented three potential attack scenarios. The preferred strategy was a joint assault by Hamas and Hezbollah, ideally launched during Jewish holidays when tensions in Jerusalem were typically high.

The documents align with public statements made by Hamas and its allies in the years leading up to the October 7 onslaught. In a September 2021 conference in Gaza titled “Promise of the Hereafter – Post-Liberation Palestine,” Palestinian factions openly discussed their plan for ruling all of Israel’s territory “from the river to the sea.” Hezbollah leader Hassan Nasrallah echoed similar sentiments in May 2023, claiming that Israel’s home front was “weak, fragile, anxious, always ready to pack up and leave.”

In mid-2023, a Hamas delegation, led by Haniyeh and senior commander Saleh al-Arouri, visited Iran to discuss military coordination. Iranian officials reportedly expressed their view that the “removal of Israel from the map” was now a tangible possibility. Leading up to October 7, Hamas continued to refine its strategy. In April 2023, Sinwar told Hamas political bureau member Muhammad Nasser that the previous conflicts with Israel had been “a walk in the park” compared to the planned attack, which would “shatter the enemy into fragments.”

Rost’s analysis concludes that the October 7 assault was not merely an isolated terror operation but the culmination of years of planning based on a fundamental shift in Hamas’ strategic thinking. The group, along with its Iranian and Hezbollah backers, increasingly viewed Israel’s destruction as a realistic goal rather than distant rhetoric. However, the heavy losses Hamas has suffered in the ensuing Israeli counteroffensive may have forced it to reassess this ambition – for now.

As of early 2025, the IDF has continued its military campaign against Hamas in Gaza. However, reports suggest that Hamas is rebuilding, with over 25,000 Hamas fighters and 5,000 from Palestinian Islamic Jihad still armed. The ceasefire that had temporarily halted hostilities ended, as Prime Minister Benjamin Netanyahu vowed a forceful response to Hamas’s refusal to release Israeli hostages.

Main article image: Gaza, October 7. Hani Alshaer/Anadolu Agency via Reuters Conne

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The Israeli Air Force commenced a series of targeted strikes against Hamas positions across Gaza, marking the most extensive aerial assault on the group since the conclusion of last year’s ground manoeuvre. Military sources indicate that the operation, meticulously planned in secrecy, aims to neutralize high-ranking Hamas leaders, weapons storage facilities, and underground tunnel networks.

The new Chief of Staff Eyal Zamir is commanding the operation together with Shin Bet Director Ronen Bar from the Kirya military headquarters in Tel Aviv. According to security officials, the offensive will continue for as long as necessary and may expand beyond aerial strikes if deemed appropriate.

Prime Minister Netanyahu, citing the urgency of the situation, has been granted permission to postpone his scheduled testimony in his ongoing corruption trial, as the air campaign takes precedence.

The White House has confirmed that it was informed in advance of Israel’s military action. White House spokesperson Caroline Levitt stated that former President Donald Trump warned, “Hamas, the Houthis, and Iran will face severe consequences for their actions against Israel and the United States.”

Meanwhile, Hamas has condemned the Israeli offensive, accusing Netanyahu’s government of “renewing aggression against defenceless civilians in Gaza.” The group further warned that the cancellation of the ceasefire agreement endangers Israeli hostages held in the enclave. Palestinian sources report over 200 fatalities in Gaza, including several high-ranking Hamas officials, among them Mahmoud Abu Watfa, the head of Hamas’s Interior Ministry.

With the renewed hostilities, the IDF Home Front Command has adjusted security measures in border communities, restricting educational activities in areas near Gaza while maintaining regular activity levels in western Negev and Lachish regions.

Defense Minister Katz emphasized that military pressure will continue until all Israeli hostages are freed and all strategic war objectives are achieved. “If Hamas does not release the hostages, the gates of hell will open in Gaza,” he warned.

As the conflict escalates, Israel braces for potential retaliatory attacks, while diplomatic channels remain strained amid growing concerns over regional stability.

Main image credit: On the right, Shin Bet chief Ronen Bar, Chief of Staff Eyal Zamir, and Air Force commander Tomer Bar, in Kirya headquarters. ( Photo: IDF Spokesperson )

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This development materialised via sale that involved several key figures offloading portions of their stakes. An early investor in Next Vision Yosef Sandler parted with shares worth NIS 44.3 million, reducing his ownership to 8.6%. Chairman Chen Golan sold NIS 55 million worth, lowering his stake to 5.7%, while VP of Technology Boris Kipnis offloaded NIS 40 million in shares. Director Nachman Benshaya sold shares valued at NIS 39.3 million, and CEO Michael Grossman cashed out NIS 50 million worth of stock. Despite the sales, a senior company source emphasized that the move was not premeditated but rather a response to strong external interest.

“We didn’t plan this sale,” the source told reporters. “A foreign investor approached us with a serious offer, and given the growing attention we’ve seen from such players, we couldn’t say no. It escalated quickly, and we had to find willing sellers to meet the demand.” The source underscored Next Vision’s strategy of welcoming significant investors who can add value, noting, “When a foreign player wants in, it’s a positive signal for the market and our shareholders.”

Next Vision, based in Raanana, has been a standout performer since its 2021 IPO, boasting a staggering 1,770% surge in its stock price. The company, which specializes in stabilized day and night cameras for drones and other vehicles, now commands a market value of NIS 7.7 billion – putting it within striking distance of the Tel Aviv 35 index. With the next index update looming in April, analysts see a strong chance for inclusion if its momentum holds.

The company’s recent financials further fuel its success story. In 2024, Next Vision reported a 121% revenue leap to $115 million, exceeding its sales target, while net profit soared 2.4 times to $66 million – representing 57.7% of revenue. A $33.2 million dividend was also announced, reflecting confidence in its cash flow. The ongoing war in Europe has been a key driver, with nearly 60% of last year’s sales tied to the region. Adding to its momentum, Next Vision recently secured a $30 million order spanning three years, building on a $101 million order backlog reported earlier this month.

Looking ahead, the company has set an ambitious 2025 revenue goal of $160 million, a 39% increase over 2024.

The transaction comes amid broader market trends, with the shekel weakening against the dollar since January, making Israeli stocks potentially more attractive to foreign buyers. Next Vision’s ability to draw international capital underscores its appeal in a competitive global tech landscape. As one of the most successful IPOs from the 2021 wave, the company continues to ride high on the back of an increase in military spending due to dramatic changes in geopolitics in recent years.

Main photo: Co-Founder and CEO Chen Golan (Credit: Orel Cohen).

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A major factor behind the January spike in the construction input index is the shifting workforce composition in the construction industry. The war led to restrictions on Palestinian workers, who previously constituted a significant portion of the labor force. To fill the gap, Israel has turned to foreign workers, particularly from countries like India, who demand higher wages – more than double that of Palestinian workers. As a result, labor costs have surged, driving up overall construction expenses.

The Central Bureau of Statistics (CBS) updated its methodology to reflect the real composition of workers. Previously, the index was calculated based on outdated weight distributions set in 2011, which assumed a workforce that was 95% Israeli and only 5% foreign or Palestinian. In contrast, the actual workforce prior to the war consisted of approximately 71% Israeli and 29% foreign and Palestinian workers. The CBS has now adjusted the index to align with these realities, incorporating changes in worker composition and wage estimates that had been accumulating since the war began.

The result of these changes is a stark 5.3% increase in the residential construction input index over the past year and a 12.3% increase since the war started. The January update alone reflected a 4.5% increase in labor costs, compared to a mere 1.1% rise in other construction-related expenses. This recalibration means that real estate contracts linked to the construction index will now carry higher price tags, adding financial pressure on home buyers while benefiting property sellers.

Alongside construction-related price hikes, government-imposed tax increases have also played a pivotal role in driving up the overall CPI. A series of tax hikes that took effect on January 1 were among the leading contributors to inflation, particularly in four key categories: cigarettes and tobacco (up 5.2%), electricity (4.1%), municipal taxes (2.3%), and new cars (2.2%). If not for these tax-related increases, the CPI rise in January would have been only half of what was recorded.

Fuel and water prices, which are also regulated by the government, saw significant increases as well. However, one notable factor that helped to moderate inflation was a drop in flight prices. Airfare costs declined by 5.7%, as fewer Israelis travelled abroad in January, leading to lower demand and consequently lower prices. This decrease in flight prices helped to counterbalance some of the CPI’s upward pressure.

With the residential construction input index recalibrated to reflect actual market conditions, housing prices are expected to remain elevated, making affordability a growing concern for potential homebuyers. The combination of rising labor costs and government-imposed taxes suggests that inflationary pressures will persist in the near term.

Image credit: Freepik

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At the start of 2023, Israel had 8.22 million internet users, reflecting a penetration rate of 90.3%. Additionally, 7.06 million social media users – 77.5% of the total population – actively engaged in digital platforms, underscoring the nation’s deep-rooted connectivity. Mobile connections surpassed the population, reaching 10.65 million, a staggering 116.9% penetration rate.

These statistics position Israel as a prime market for the next generation of digital transformation, with Apple and Meta vying for consumer allegiance. Apple’s dominance in premium hardware and growing services segment contrast with Meta’s vision of immersive, AI-powered experiences. The outcome of this battle will likely influence how consumers interact with technology in the coming years.

Apple vs. Meta: A Clash of Strategies

Apple’s stronghold in the device market remains unshaken. In its latest quarter, Apple reported $124 billion in revenue, significantly outpacing Meta’s $48 billion. While iPhone sales have plateaued, Apple’s ecosystem – comprising iPads, Macs, and a burgeoning services sector – continues to generate stable growth. Services alone expanded by 14%, demonstrating Apple’s ability to pivot from pure hardware reliance.

Conversely, Meta’s strategy revolves around the metaverse and smart wearables. Despite accumulating nearly $60 billion in losses on Reality Labs over the past four years, Meta founder Mark Zuckerberg envisions a future where AI-driven smart glasses replace traditional smartphones. He predicts that over 3 billion people who wear glasses today could adopt AI-connected eyewear within a decade. If this prediction materializes, it could upend Apple’s dominance in mobile technology.

For Israeli consumers, the Apple-Meta rivalry presents exciting possibilities and potential disruptions. As social media adoption remains high, Meta’s push toward AI-driven, immersive experiences could gain traction, especially among younger demographics. However, Apple’s seamless ecosystem and strong brand loyalty might secure its position as the go-to provider for premium digital experiences.

Should smart glasses gain widespread adoption, as Zuckerberg envisions, the traditional smartphone’s role may diminish. This shift could impact Apple’s revenue model, forcing it to innovate beyond its current offerings. Conversely, if Meta’s metaverse ambitions fail to generate sustainable profits, Apple’s hardware-centric approach will remain dominant.

Israel’s digitally engaged population will certainly embrace the benefits of the two tech giants rivalry. While Meta bets on an AI-driven, immersive future, Apple’s calculated expansion into services and wearables keeps it ahead in profitability and consumer trust. As Israeli consumers continue to embrace digital innovation, the impact of this tech battle will be felt across industries, from e-commerce to social interaction and beyond.

Ultimately, whether AI-driven glasses replace smartphones or remain a niche product will depend on consumer behaviour and technological advancements. What is certain is that Apple and Meta’s competition will continue to drive digital transformation in Israel and beyond, making the next decade a defining period for global and local digital landscapes.

Image credit: 3D printed Meta and Facebook logos (REUTERS)

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December 2024 marked a record-breaking period for mortgages in Israel, with total loans reaching an unprecedented NIS 13.8 billion. This surge was driven by five key buyer demographics, including those purchasing apartments priced between NIS 2-3 million. These buyers often took out substantial loans, with nearly half securing mortgages exceeding NIS 1.2 million.

Another trend was the rise in “balloon” loans – mortgages with deferred repayment terms—which totalled NIS 3.2 billion in December alone, doubling the previous record. Real estate investors also played a significant role, with their activity levels reaching the highest since mid-2022.

However, one of the most intriguing developments was the surge in foreign buyers. This group, while still a relatively small portion of the overall market, has seen its activity increase dramatically, especially in Jerusalem’s luxury sector.

Historically, foreign buyers played a more significant role in Israel’s property market, with peak years in 2005-2006 seeing upwards of 400 transactions per month. However, factors such as the global financial crisis, rising property prices, and tax policy changes led to a steep decline. During the pandemic, foreign transactions dwindled to just dozens per month.

The tide has since turned. By 2024, foreign purchases had rebounded, with monthly transactions reaching approximately 150 apartments – a significant improvement compared to the lows of five years ago. Jerusalem has been the epicentre of this resurgence, with foreign buyers snapping up nearly 100 apartments per month in the city and its surroundings.

The demographics of these buyers reflect a shift toward ultra-Orthodox and religious communities. Many are purchasing homes as part of a long-term plan, driven by rising global antisemitism and the desire for a foothold in Israel. For example, projects like Israel Canada’s “Midtown” in Jerusalem have attracted substantial interest from American Hasidic communities.

Foreign residents have become a dominant force in Jerusalem’s luxury real estate sector. In November and December alone, they purchased 22 apartments priced above NIS 10 million, making up a significant share of high-end transactions in 2024. Notably, these buyers often seek new developments, contributing to the surge in mortgage activity at the end of the year as they rushed to complete purchases ahead of a VAT increase.

A senior mortgage banker noted that most foreign buyers hail from the United States, England, and France. While Americans and Britons tend to acquire properties as a form of security without immediate plans to relocate, French buyers are more inclined to move to Israel. The Tishrei holidays in September traditionally see a spike in purchases, reflecting a pattern of increased activity tied to cultural and religious visits.

While foreign buyers still account for a modest share of Israel’s property market – estimated at 2% of transactions in 2024 – their influence is growing, particularly in Jerusalem. As global uncertainties persist, this trend is likely to continue, reinforcing Jerusalem’s status as a prime destination for foreign investment and underscoring the evolving dynamics of the Israeli real estate market.

Image credit: Freepick

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Yaron also told Reuters that a stronger shekel and faster inflation moderation could accelerate these cuts. On the broader economic front, he linked regional stability to economic growth, emphasizing the potential benefits of a lasting ceasefire following the recent conflict. He predicted GDP growth of 4% in 2025 and 4.5% in 2026, following a modest 0.6% in 2024, provided further escalations are avoided.

While addressing Israel’s rising budget deficit due to significant war expenditures, Yaron praised the 2025 budget’s emphasis on fiscal responsibility, including spending cuts and tax increases. He noted that while defense spending might increase the debt burden in 2025, adjustments in the 2026 budget would likely stabilize the debt-to-GDP ratio.

International credit rating agencies have also weighed in on Israel’s economic outlook. Both Fitch and Moody’s suggested that a stable ceasefire could reduce risks to Israel’s credit rating, which had been under pressure in recent months. However, S&P warned of the agreement’s fragility, highlighting the potential for renewed regional conflicts, including tensions with Hezbollah in Lebanon and disruptions in the Red Sea.

Israel’s debt-to-GDP ratio, which climbed to 69% in 2024—the highest level since 2010 excluding the pandemic—remains a significant concern. This increase reflects the immense costs of the Iron Sword War, estimated at approximately NIS 100 billion. Despite this, historical trends indicate that Israel has previously succeeded in reducing its debt ratio over time, offering hope for a return to fiscal stability.

Image credit: Bank of Israel Governor Amir Yaron (REUTERS/Ronen Zvulun)

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Recent weeks have seen a shift in economic sentiment, with forecasters now anticipating more significant interest rate cuts, potentially starting as early as April. The range of inflation forecasts has also broadened, reflecting the uncertainty in economic conditions.

The recent hostage deal and the ceasefire implemented on Sunday have further fuelled optimism about Israel’s economic prospects for 2025. The Tel Aviv 35 index has seen a nearly 6% rise in the past few weeks, and Israel’s risk premium, as measured by the 10-year Credit Default Swap (CDS), has decreased significantly. Since last October, following an Iranian drone attack, Israel’s CDS has dropped by 30%, indicating a reduced perception of default risk. Consequently, Israel’s bond yields have trended downward, with the 10-year yield at 4.2%.

The shekel has demonstrated notable strength recently, appreciating by 7% against the dollar since August. It has reached a two-year high against a basket of currencies from Israel’s major trading partners. On Monday, the dollar exchange rate fell to 3.58 shekels per dollar. A stronger shekel typically signals cheaper imports, which could help moderate inflation, although this effect is not guaranteed.

The December consumer price index provided a pleasant surprise, coming in at an annual rate of 3.2%, lower than the expected 3.4%. Despite this, inflation is expected to rise in the coming months, potentially approaching 4%, driven by recent tax increases. These include hikes in water, electricity, and property taxes, as well as an increase in VAT and vehicle purchase taxes. These measures are likely to reduce household disposable income and dampen private consumption.

Interest Rate Scenarios

Economists have updated their forecasts, presenting three possible scenarios for interest rate changes and inflation:

Bank of Israel Scenario: Predicts one to two interest rate cuts with inflation around 2.6%.

Moderate Scenario: Supported by Bank Hapoalim, Discount Bank, and Harel Insurance Company, this scenario anticipates two rate cuts and inflation ranging from 2.4% to 2.8%.

Optimistic Scenario: Backed by Mizrahi Tefahot, Leader Capital Markets, and Meitav, this scenario expects three rate cuts with inflation between 2.4% and 2.7%.

Jonathan Katz of Leader Capital Markets forecasts up to three interest rate cuts, beginning in April, with a potential reduction of the rate to 3.75% by year-end. He attributes the improved economic outlook to the strengthening shekel and easing supply-side constraints. However, Modi Shafrir of Bank Hapoalim highlights ongoing uncertainties, particularly concerning inflation and geopolitical developments. Shafrir expects inflation to reach 2.8% next year, with only two rate cuts anticipated.

While the Israeli economy shows promising signs of recovery and resilience, particularly with the strengthening shekel and positive market indicators, significant uncertainties remain. Inflation is projected to rise initially due to recent tax hikes but may stabilize later in the year. With various factors at play, including geopolitical stability and economic policies, sustained peace in the region will most definitely be key in realising a more optimistic economic scenario.

Image credit: freepik.com

<p>The post Shifting Economic Outlook for Israel in 2025 first appeared on Isranomics.</p>

The Tel Aviv Stock Exchange’s flagship index, the TA-125, has delivered a robust performance, outpacing the S&P 500 in recent months. This surge is particularly noteworthy given the underperformance seen in the previous year due to political instability and the outbreak of war in October 2023. The easing of tensions on the northern front and a decrease in risk premiums have contributed to this rally, marking a turnaround for Israel’s financial markets.

Another indicator of economic recovery is the resurgence in foreign investments. The Central Bureau of Statistics reported that foreign investments in Israel reached $11.5 billion in the third quarter of 2024, the highest quarterly figure since 2021. This influx underscores the sustained attractiveness of Israel’s economy, particularly its high-tech sector, which remains a pivotal driver of growth.

Israel’s current account surplus has also seen a significant rise, with a cumulative surplus of $24.8 billion recorded between late 2023 and the third quarter of 2024. This surplus reflects a strong export performance and supports the appreciation of the shekel, which has strengthened by over 5% against the dollar since the war began. The robust currency helps moderate inflation, providing relief for both businesses and consumers.

In a global ranking by The Economist, Israel secured sixth place among the strongest economies of 2024. Factors contributing to this recognition include impressive stock market returns, low unemployment, and a 6.7% growth rate for the period measured. While global economies like Spain, Greece, and Italy topped the list, Israel’s performance stood out amidst its challenges.

Despite these positive developments, certain vulnerabilities remain. Israel’s annual GDP growth for 2024 is projected to be near zero, with per capita growth expected to decline. Additionally, a rising deficit, anticipated to exceed 7.5% by year-end, and multiple credit rating downgrades highlight underlying economic pressures. International observers have also expressed concerns about the pace of Israel’s post-war recovery.

Nonetheless, Israel’s economic fundamentals remain strong. Private consumption reflects optimism, and the Bank of Israel has proven its ability to stabilize markets, as seen in its intervention in the foreign exchange market at the outset of the war. Looking ahead, a strong shekel and moderating inflation rates provide further reasons for confidence. Economists expect inflation to return to the Bank of Israel’s target range of 1%-3% within the next year.

<p>The post Israel’s Economy Shows Resilience and Growth Amid Challenges first appeared on Isranomics.</p>