Israel’s post-war economic recovery will take longer than many in the country think, according to forecasts in the International Monetary Fund’s latest World Economic Outlook report. The International Monetary Fund expects real growth in Israel in 2024 at only 0.7%, which means a decline in per capita terms.
In the IMF’s view, if the war ends, we will see improvement in the coming years, but it will be slow. Growth expectations for 2025 are 2.7%, gradually rising to 3.4% in 2029.
Related articles
Bank of England leaves interest rates unchanged, again cuts growth forecasts
JPMorgan lowers Israel’s growth forecast for 2024
These numbers represent a sharp decline from the previous forecast in April, when the International Monetary Fund expected growth of 1.6% for the Israeli economy this year and 5.4% next year. Despite this, the IMF’s medium-term forecasts remain different from the outlook for the Israeli economy.
For example, Standard & Poor’s estimates zero growth this year in Israel and 2.2% in 2025. Moody’s, which issued a very tough report on the Israeli economy when it lowered the country’s credit rating by two notches, expects 0.5% growth this year. General and 1.5%. % next year. The Bank of Israel is closer to the IMF, with expectations for growth of just 0.5% this year but a fairly strong recovery next year that will lead to growth of 3.8%.
The positive news is that the IMF sees inflation in Israel slowly declining to an annual rate of 3% in 2025, which is within the Bank of Israel’s target range of 1-3%, while the unemployment rate is expected to remain low, reaching 3.1. % at the end of the current year and 3.5% at the end of 2025.
The IMF hedges its forecasts, saying, “The outlook for Israel is exposed to significant risks given the unpredictability of the impact of the conflict in the region. The fiscal forecasts are based on the assumption that in the short term higher government spending is used to support the economy and cover military costs, but after 2024 Fiscal measures are expected to help contain the fiscal deficit.
The report expects a global slowdown in economic growth. Expectations for the United States indicate growth of 2.8% this year and 2.2% next year. For China, the forecast for 2024 is growth of 4.8%, while in Europe as a whole growth is expected to be stable at 1.7%.
Published by Globes, Israel Business News – en.globes.co.il – on October 22, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.