The Trump administration’s tariff plan would minimize the Israeli financial system’s GDP by billions of shekels throughout 2025 alone, in response to preliminary estimates by the Ministry of Finance.
At this stage, amid the uncertainty that also surrounds the extent of tariffs that might finally be imposed on Israeli items, the annual injury to progress is estimated at lower than 0.5% of GDP – beneath NIS 10 billion. This injury is immediately attributable to the shock in international commerce surrounding the tariff plan. Regardless of the damaging influence, the anticipated charge of loss to GDP is average in contrast with forecasts for different international locations, together with the US itself.
The Ministry of Finance chief economist will publish Israel’s revised progress forecast in the direction of the tip of Could or early June. The Ministry of Finance’s most up-to-date forecast, printed in October 2024, predicted 4.3% GDP progress charge for the Israeli financial system in 2025. This comes after two years of faltering progress because of the conflict.
As reported by “Globes” final month, even earlier than Trump’s controversial tariff plan was introduced, the Ministry of Finance was already speaking about revising Israel’s 2025 progress forecast downwards. The rationale on the time was primarily technical. GDP for 2024 exceeded the sooner pessimistic forecasts, so there was supposedly much less room for restoration in 2025.
This stress to decrease the expansion forecast was bolstered this week, with the publication by the Central Bureau of Statistics, of the ultimate GDP progress determine of 1% for 2024. This can be a low charge in historic phrases, however barely greater than the earlier estimate of 0.9% by the Central Bureau of Statistics.
Development forecast to be revised downward
Whereas the Ministry of Finance has lengthy debated whether or not GDP efficiency in 2024 requires a reassessment and a extra average evaluation of progress in 2025, the problems of tariffs requires no discussions. The query isn’t whether or not to cut back the forecast however by how a lot.
The deliberate discount within the Ministry of Finance’s forecast isn’t sudden. The nation points two official macroeconomic forecasts – by the Ministry of Finance and the Financial institution of Israel, which already minimize its progress forecast earlier this month, from 4% to three.5%. The Ministry of Finance is extra optimistic than the Financial institution of Israel and can in all probability scale back the forecast by a small quantity from 4.3%.
Earlier this week, the Worldwide Financial Fund (IMF) printed a worldwide overview taking into consideration the tariff problem. The overview didn’t give attention to Israel however did include a revised progress forecast for the nation of three.2%, an enchancment on the IMF’s October 2024 forecast of two.7% GDP progress in 2025, in distinction to the final pattern through which the IMF minimize the worldwide progress forecast from 3.3% to 2.8%.
Printed by Globes, Israel enterprise information – en.globes.co.il – on April 24, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
