ISRAEL
Analyst
Sani Ziv
UN Economic ConsultantRecent Country Insights
May CPI surprised to the downside, but inflation remains near 3% – rate cut unlikely due to geopolitical risks
ISRAEL · In Brief · 16 Jun 2025
May CPI surprises with a 0.3% drop, driven by a sharp fall in prices for trips abroadMay CPI in Israel surprised to the downside, falling 0.3% month-on-month, driven primarily by a sharp 15.5% drop in overseas travel prices. This brought the annual inflation rate down to 3.1%, from 3.6% in April....
Israel’s war economy – economic outlook following the Iran strike
ISRAEL · In Brief · 14 Jun 2025
On June 13, 2025, Israel launched a major military operation inside Iranian territory, targeting nuclear sites, missile launch infrastructure, and senior military command centers. The strikes caused significant damage and reportedly killed several high-ranking Iranian officials and military offic...
Israel’s budget deficit narrowed to 5.0% of GDP in May; Stronger-than-planned tax revenues may offset above-budget defense spending, assuming Gaza de-escalation by Q3
ISRAEL · In Brief · 11 Jun 2025
The Ministry of Finance released the May budget figures yesterday, and overall, the data looks solid—even though we’re still operating in a high-expenditure environment. The fiscal deficit for May came in at NIS 8.6 billion (~$2.5 billion), with the trailing 12-month deficit edging down slightly ...
Tourism to Israel drops sharply in May amid missile threats and flight suspensions
ISRAEL · In Brief · 10 Jun 2025
Tourism to Israel declined sharply in May, as the number of incoming visitors fell by 25.4% compared to April (seasonally adjusted), reaching only 95,000 arrivals. This figure is 67.4% lower than in May 2023, underscoring the ongoing impact of the war. The decline follows a gradual recovery earli...
Israeli geopolitics: Reconfiguring the Middle East and its strategic implications
ISRAEL · Report · 03 Jun 2025
Key takeaways from this report: - President Trump’s visit to Saudi Arabia, the UAE, and Qatar signaled a strategic realignment. It underscored growing divergence with Israel over Gaza and elevated the Gulf states as central partners in regional innovation and diplomacy. - Trump’s meeting...
Hamas rejects ceasefire proposal in current form; fiscal risks for 2025 rise
ISRAEL · In Brief · 03 Jun 2025
Following the U.S.-backed ceasefire proposal, Hamas has, for now, rejected the offer in its current form. While Hamas sources told Arab media that the proposal was not "categorically" rejected and could serve as a basis for continued talks, both Israel and the United States consider the group's r...
BoI keeps rate at 4.5%; hawkish tone, but easing later this year still possible
ISRAEL · In Brief · 27 May 2025
Policy decision in line with expectations The central bank of Israel kept its benchmark interest rate unchanged at 4.5% on May 26th, for the eleventh consecutive meeting. This decision was in line with market expectations. Forward guidance unchanged The Bank of Israel preserved the exact same for...
Israel’s Q1 GDP shows moderate rebound, but recovery remains uneven
ISRAEL · In Brief · 19 May 2025
Israel’s GDP grew at an annualized rate of 3.4% in the first quarter of 2025, up from 1.9% in Q4 2024, according to preliminary estimates released yesterday by the Central Bureau of Statistics. When adjusted for the drop in import taxes on vehicle purchases—technically included in GDP—the underly...
April CPI analysis: overseas travel drives inflation surprise; likelihood of rate cut declines
ISRAEL · In Brief · 16 May 2025
Israel’s Consumer Price Index (CPI) rose by 1.1% in April, exceeding market expectations for 0.6%-0.7%. The surprise was driven primarily by a 31% jump in overseas travel costs. The sharp increase in flight prices abroad in April likely reflects high demand ahead of the summer season. Since 2023,...