Following recent negative macroeconomic data, JPMorgan has lowered its forecast for Israel’s GDP growth in 2024 to just 1.4%, down from 1.6% in its previous forecast.
Under the title “Israel: An Unlucky Mix of Growth and Inflation Data,” US investment bank JP Morgan released revised forecasts for the Israeli economy, citing a recent set of negative macroeconomic data including a 1.2% year-on-year GDP growth in the second quarter, and an annual inflation rate of 3.2% – the highest since November.
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JPMorgan confirms that second-quarter growth was much lower than market expectations of 5.8%-5.9%, and points to a range of negative indicators such as lower investment and a sharp drop in exports in the second quarter. On the positive side, the bank confirms that private consumption remains strong.
As for the Bank of Israel’s measures, JPMorgan expects tackling inflation to take a higher priority than encouraging growth. The bank expects to cut interest rates by 0.25% in November and 0.75% by mid-2025. By contrast, the Bank of Israel’s research department expects only one 0.25% rate cut next year.
Following recent negative macroeconomic data, JPMorgan has lowered its forecast for Israel’s GDP growth in 2024 to just 1.4% from its previous forecast of 1.6% and to 4.4% in 2025. The forecast is slightly lower than the Bank of Israel’s forecast of 1.5% growth in Israel in 2024.
This article was published in Globes, Israeli Business News – en.globes.co.il – on August 20, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
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