Israel Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

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  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Israel Country Risk Report
Product Price
$1,195.00

Core Views

  • Political risks have increased sharply, with more than one hundred Israeli and Palestinian deaths recorded between October 2015 and January 2016, and with no sign of appeasement in tensions. Prime Minister Benjamin Netanyahu controls a coalition with a majority of just one seat in the Knesset and it is likely that it will not be able to see out its four year term. Economic growth will accelerate over the coming quarters, as government spending increases, and as exports and private consumption pick up following one-off slumps.

Key Risks

  • A delay in the Fed hiking its policy rate would lead to the shekel appreciating sooner than we anticipate. The export sector - which accounts for 35% of GDP - would suffer from a strengthening currency.

  • The ultra-Orthodox push to roll back on reforms implemented in the previous years could lead to the long-term fiscal outlook being significantly weakened in addition to lowering productivity growth in the long-run.

  • The current wave of violence between Israelis and Palestinians could escalate to a conflict between Israel and Hamas, or to a full-scale armed insurrection similar to the first and second intifadas.

Macroeconomic Forecasts (Israel 2014-2017)
Indicator 2014 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y 2.8 2.1 3.0 3.5
Nominal GDP, USDbn 303.8 284.1 294.5 316.5
Consumer price inflation, % y-o-y, eop -0.2 -1.0 1.5 2.5
Exchange rate ILS/USD, eop 3.90 3.89 3.85 3.75
Budget balance, % of GDP -2.9 -2.5 -3.2 -3.0
Current account balance, % of GDP 3.0 5.5 5.8 5.7
Executive Summary
5
Core Views
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Gas Framework Approval No Game Changer
8
GDP By Expenditure Outlook
10
TABLE: GDP GROWTH FORECASTS
10
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
11
No Significant Risk From Loosening Of Fiscal Discipline
11
Structural Fiscal Position
12
TABLE: BREAKDOWN OF PUBLIC REVENUES & EXPENDITURE, % OF TOTAL
13
External Trade And Investment Outlook
14
Further Improvements Masking Export Weakness
14
Outlook On External Position
15
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
15
TABLE: BREAKDOWN OF IMPORTS IN 2014
15
TABLE: BREAKDOWN OF EXPORTS IN 2014
16
Monetary Policy
17
Moderate Tightening Not Sooner Than Late 2016
17
Monetary Policy Framework
18
Chapter 2: 10-Year Forecast
21
The Israeli Economy To 2025
21
Encouraging Growth Prospects Over The Coming Decade
21
TABLE: LONG-TERM MACROECONOMIC FORECASTS
21
Chapter 3: Political Outlook
25
SWOT Analysis
25
BMI Political Risk Index
25
Domestic Politics
26
No End In Sight For Israeli Isolation
26
TABLE: POLITICAL OVERVIEW
26
Long-Term Political Outlook
28
Long-Lasting Peace With The Palestinians Unlikely
28
Chapter 4: Operational Risk
33
SWOT Analysis
33
Operational Risk Index
33
Operational Risk
34
TABLE: OPERATIONAL RISK
34
Trade Procedures And Governance
35
TABLE: MENA - TRADE PROCEDURES AND GOVERNANCE RISK
35
TABLE: EXPORT AND IMPORT DOCUMENTS
35
TABLE: TRADE PROCEDURES BREAKDOWN
35
Vulnerability To Crime
36
Chapter 5: BMI Global Macro Outlook
41
Global Macro Outlook
41
Tail Risks Mounting Amid Sub-Par Growth
41
TABLE: GLOBAL ASSUMPTIONS
41
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
42
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%)
42
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
43
TABLE: MACROECONOMIC DATA & FORECASTS
45

Assess your risk exposure in Israel with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Israel with confidence.

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