Latest news with #IsraelEconomy
Yahoo
26-06-2025
- Business
- Yahoo
Israel Long-Term Outlook Helped by Iran War, Central Bank Governor Says
(Bloomberg) -- The war on Iran to curb its military and nuclear program will boost Israel's long-term economic prospects, according to Central Bank Governor Amir Yaron. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice US Renters Face Storm of Rising Costs US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Commuters Are Caught in Johannesburg's Taxi Feuds as Transit Lags Mapping the Architectural History of New York's Chinatown The Israeli monetary chief, speaking to Bloomberg Television on Wednesday, said that would especially be the case if his country's government can end the war in Gaza soon. 'Markets signal that Israel's geopolitical risk has been significantly reduced,' Yaron said, referring to the aftermath of the 12-day campaign against Iran. If the war in Gaza is 'resolved in a sustainable manner, we will have a clear path for Israel going back to its potential trajectory for growth — and maybe even doing some catching up.' Israel's market-risk premiums have reduced this week following US strikes on Iranian nuclear facilities over the weekend and a ceasefire announced by US President Donald Trump on Tuesday. The shekel is the world's best-performing currency since the end of last week, according to data compiled by Bloomberg, gaining 2.5% to 3.40 against the dollar. The spread for Israel's five-year credit-default swaps — used by some traders to hedge against a default — has dropped to around 95 basis points from 112 basis points. The multi-front conflict that began with Hamas' attack in October 2023 has stretched Israel's finances and strained its economy. It's been downgraded several times, while its fiscal deficit and borrowing have soared. Yaron, who is also by law the government's chief economic advisor, said Israel would probably have to increase its budget for this year. Approved in March, it set a target deficit of 4.7% of gross domestic product. Israel launched an initial barrage of drones and missiles at Iran on June 13, and the two sides exchanged regular fire until US President Donald Trump declared a ceasefire in the early hours of Tuesday. The aim of Prime Minister Benjamin Netanyahu's government was to curb its arch enemy's nuclear capabilities and ballistic-missile stockpile. While the country is still assessing the extent of its achievements, Iran's military looks to have been significantly degraded and its atomic sites damaged. The brief campaign likely cost Israel 1% of GDP, or about 20 billion shekels ($5.9 billion), Yaron said. Gaza War Israel is still fighting Hamas, one of Iran's allied militant groups, in Gaza and there's no indication that war will end imminently. If it does, 'that of course opens up even bigger economic prospects,' Yaron said. 'Israel is going to have to reassess its priorities,' the governor said, referring to the need to maintain a 'responsible fiscal standing' by keeping a healthy balance between civilian and defense spending. Last year, Israel's military spending surged by 65% to $47 billion, according to the Stockholm International Peace Research Institute. The country is the world's biggest spender on defense in per capita terms, SIPRI data says. 'If the geopolitical situation improves, it'll allow perhaps some shifting between defense spending, civilian spending, and maybe fewer increases in defense spending,' Yaron said. The central bank has held its base interest rate at 4.5% since the beginning of 2024. Yaron said monetary officials have to weigh two opposing factors for future rate decisions: the shekel's appreciation and labor shortages because of how many workers are serving in the military's reserves. The former should reduce inflationary pressure, while the latter is doing the opposite. Now at 3.1%, Israel's annual inflation rate is above the official target of 1% to 3% and has been since last July. 'Which of these two comes out and at what phase is still hard to know,' Yaron said. 'We still think that a year out we should see the general fundamental forces pushing inflation down, but what's happening in the shorter run is hard to tell.' (Updates with more context.) Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push How to Steal a House Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Apple Test-Drives Big-Screen Movie Strategy With F1 Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
05-06-2025
- Business
- Bloomberg
Israeli Assets Gain as Traders Gauge Netanyahu Coalition Woes
Israel's bonds and stocks rose as markets began factoring in that Prime Minister Benjamin Netanyahu's government was at risk of collapse, an outcome that some traders view as a positive for the economy. The government's dollar bond due in 2048 jumped more than a cent on the dollar to 74 cents, one of Thursday's best performers across emerging markets. Israel's benchmark TA-35 stock index extended a recent record and the shekel traded near two-year highs.
Zawya
28-05-2025
- Business
- Zawya
Israeli credit rating unlikely to get upgrade during Gaza war, S&P official says
JERUSALEM: Israel's credit rating is unlikely to be upgraded until the war in Gaza ends, since the conflict weighs on the Israeli economy and its fiscal position, S&P Global Ratings Director Maxim Rybnikov said on Tuesday. Any widening of the conflict to Iran would prompt a ratings downgrade, but that is not S&P's baseline scenario, Rybnikov said. S&P earlier this month affirmed Israel's long- and short-term foreign and local currency sovereign credit ratings at "A/A-1" and maintained a "negative" outlook. "For the outlook side, it's all about security risks and how this is going to unfold," Rybnikov told the Israel Democracy Institute's annual economic conference. "The key downside triggers are, first of all, military conflicts hampering some of Israel's characteristics, such as economic growth, fiscal position and balance of payments more than we currently anticipate." Even in the medium term, higher defence spending is expected to put pressure on Israel's fiscal position, with projections of a budget deficit of 5% in 2027 and 4.2% in 2028, Rybnikov said. He said the war that began in October 2023 had already lasted longer than initially anticipated. "We don't know ... the way forward and how the war is going to end, and for us, it certainly presents risks, especially in a scenario where there's a more significant escalation," he said. Yet, Israel's outlook could move back to "stable" in the event of a reduced likelihood of military escalation and an easing in broader security risks. "We still expect some stabilisation to happen over the medium term. What forms and how quickly it will take is still uncertain," Rybnikov said. Globally, he said there has been a "seismic shift" in U.S. trade policies and S&P assumes 25% tariffs on items such as water, steel, semiconductors and aluminum in addition to a 10% across the board tariff. But he does not expect a U.S. recession from a slowdown in growth in the U.S. and China.
Reuters
27-05-2025
- Business
- Reuters
Israeli credit rating unlikely to get upgrade during Gaza war, S&P official says
JERUSALEM, May 27 (Reuters) - Israel's credit rating is unlikely to be upgraded until the war in Gaza ends, since the conflict weighs on the Israeli economy and its fiscal position, S&P Global Ratings Director Maxim Rybnikov said on Tuesday. Any widening of the conflict to Iran would prompt a ratings downgrade, but that is not S&P's baseline scenario, Rybnikov said. S&P earlier this month affirmed Israel's long- and short-term foreign and local currency sovereign credit ratings at "A/A-1" and maintained a "negative" outlook. "For the outlook side, it's all about security risks and how this is going to unfold," Rybnikov told the Israel Democracy Institute's annual economic conference. "The key downside triggers are, first of all, military conflicts hampering some of Israel's characteristics, such as economic growth, fiscal position and balance of payments more than we currently anticipate." Even in the medium term, higher defence spending is expected to put pressure on Israel's fiscal position, with projections of a budget deficit of 5% in 2027 and 4.2% in 2028, Rybnikov said. He said the war that began in October 2023 had already lasted longer than initially anticipated. "We don't know ... the way forward and how the war is going to end, and for us, it certainly presents risks, especially in a scenario where there's a more significant escalation," he said. Yet, Israel's outlook could move back to "stable" in the event of a reduced likelihood of military escalation and an easing in broader security risks. "We still expect some stabilisation to happen over the medium term. What forms and how quickly it will take is still uncertain," Rybnikov said. Globally, he said there has been a "seismic shift" in U.S. trade policies and S&P assumes 25% tariffs on items such as water, steel, semiconductors and aluminum in addition to a 10% across the board tariff. But he does not expect a U.S. recession from a slowdown in growth in the U.S. and China. "The numbers ... are very uncertain and there (are) significant downside risks," Rybnikov said.
Reuters
18-05-2025
- Business
- Reuters
Israel economy grew 3.4% in Q1 as war against Hamas weighs
JERUSALEM, May 18 (Reuters) - Israel's economy grew moderately in the first three months of 2025, as the war in Gaza against Palestinian Islamist group Hamas continues to take its toll. The Central Bureau of Statistics said in an initial estimate on Sunday that gross domestic product (ILGDPP=ECI), opens new tab grew by an annualised 3.4% in the January to March period from the fourth quarter, largely in line with a 3.5% consensus in a Reuters poll. On a per capita basis, GDP gained 2.2% in the first quarter. The war in Gaza broke out after Hamas' cross-border attack on southern Israel in October 2023. A ceasefire that came into effect on January 19 this year ended in mid-March, although a ceasefire with Hezbollah in Lebanon since late November has held up.
