Israel’s post-war economic recovery will take longer than many in the country think, according to projections in the International Monetary Fund’s latest World Economic Outlook. The IMF estimates Israel’s real growth rate in 2024 will be just 0.7%, which would mean a decline on a per capita basis.
The IMF’s view is that we will see improvement in the coming years once the war ends, but it will be slow. The growth forecast for 2025 is 2.7%, gradually rising to 3.4% in 2029.
Related articles
Central bank leaves interest rates unchanged, lowers growth outlook again
JP Morgan lowers Israel’s 2024 growth forecast
The figure is a sharp drop from the IMF’s previous forecast in April, when it expected Israel’s economy to grow by 1.6% this year and 5.4% next year. Nevertheless, the IMF’s forecast remains in the middle of various forecasts for the Israeli economy.
For example, S&P predicts Israel’s growth rate will be zero this year and 2.2% in 2025. Moody’s, which issued a damning report on Israel’s economy when it downgraded the country’s credit rating by two notches, forecasts growth of 0.5% this year and 1.5% in 2025. % next year. The Bank of Israel, close to the IMF, predicts growth of just 0.5% this year, but a much stronger recovery next year, at 3.8%.
The good news is that the IMF expects Israel’s inflation rate to ease slowly to 3% per year in 2025, which is just within the Bank of Israel’s target range of 1-3%, while unemployment The rate reached 3.1 and is expected to remain low. % at the end of this year and 3.5% at the end of 2025.
The IMF hedged its forecasts, saying: “Given the unpredictability of the impact of conflicts in the region, Israel’s forecasts are at significant risk. Fiscal forecasts remain buoyed by increased government spending in the short term.” It is based on the premise that it will be used for It will restore the economy and cover military spending, but fiscal measures are expected to help control the budget deficit from 2024 onwards. ”
The report predicts a slowdown in global economic growth. The forecast for the US is 2.8% this year and 2.2% next year. China’s growth rate in 2024 is predicted to be 4.8%, while Europe as a whole is expected to grow at a steady 1.7%.
Published by Globes, Israel Business News – en.globes.co.il – on October 22, 2024.
© Globes Publisher Itonut (1983) Ltd., Copyright 2024.
