IMF Slashes Israel’s 2024 Growth Forecast to 0.7%
The International Monetary Fund (IMF) announced on Tuesday that it had sharply lowered Israel’s economic growth forecast for 2024 to 0.7%, a significant drop from the 1.6% projected in April. The adjustment comes amid concerns over the unpredictable impact of regional conflicts on Israel’s economy, as detailed in the IMF’s latest World Economic Outlook report.
This revised forecast is also a considerable decrease from the 3% growth the IMF had anticipated for Israel in early October last year. Looking ahead to 2025, the IMF reduced Israel’s growth projection to 2.7% from the previous estimate of 5.4%.
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In addition to lowering growth expectations, the IMF raised its inflation forecast for Israel. The 2024 inflation rate is now expected to reach 3.1%, up from an earlier estimate of 2.4%, surpassing the Israeli government’s target range of 1-3%. The 2025 inflation forecast was also increased to 3% from 2.5%.
The report emphasized that Israel’s economic projections were subject to substantial risks due to the uncertain effects of ongoing regional conflicts. These conflicts can potentially disrupt economic activity, trade, and investment, thereby influencing growth and inflation rates.
The IMF’s adjustments highlight the challenges facing Israel’s economy in the near future, particularly as it navigates geopolitical tensions that could affect both domestic and international economic conditions.
