Breaking Update
Due to War Israel Economic Growth Forecast for 2026 Cut by 0.5%
Israel's 2026 economic growth forecast lowered by 0.5% to 4.7% amid war with Iran, impacting state revenue and business activity.
Jerusalem, 11 March, 2026 (TPS-IL) — As part of the government’s process of updating the state budget for 2026, in light of the war with Iran, the Chief Economist’s Division at the Ministry of Finance is updating the growth in GDP forecast for 2026 downward by 0.5%, from 5.2% to 4.7% and the state revenue forecast from 575.3 billion Shekels ($184 billion) to 586.3 billion Shekels ($188 billion).
The updated forecast is based on a scenario of short-term fighting on the northern front and against Iran, expected to last a few weeks. The continuation of the fighting beyond this time frame, or its expansion to additional arenas, may require a re-examination of the forecasts.
The main factors influencing the update: disruption in business activity due to the burden of the reserves and the shutdown of the economy, a temporary decline in private consumption, and an increase in geopolitical uncertainty affecting investments and foreign trade.
