The OECD has issued a report on the economic impact of the Israel-Hamas war on the Israel economy, which it sees causing a temporary but significant slowdown in economic activity.
The OECD expects Israel's GDP to grow by 2.3% in 2023, falling to 1.5% in 2024 but recovering to grow by 4.5% in 2025. This compared with the Bank of Israel, which forecasts 2% growth in 2023 and 2% growth again in 2024.
The OECD sees Israel's fiscal deficit ending 2023 at 3.1% of GDP and widening in 2024 to 5.2% of GDP. The OECD expects the debt-to-GDP ratio to expand to 65% by 2025. The Bank of Israel forecasts a fiscal deficit of 3.7% of GDP at the end of 2024, widening in 2024 to 5% of GDP, while it sees the debt-to-GDP ratio reaching 66% in 2024.
The OECD wrote, "The uncertainty about the duration, scope and intensity of the conflict and hence its economic impact is large. The projection assume no further regional escalation of the conflict with the main economic impact confined to the last quarter of 2023 and to a less extent the first quarter of 2024."
Published by Globes, Israel business news - en.globes.co.il - on November 29, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.