Jerusalem, 1 November, 2026 (TPS-IL) — Moody’s has raised its growth forecasts for Israel’s economy, projecting an expansion of 5% in 2026, up from its previous estimate of 3.7%, and 6% in 2027, compared with an earlier forecast of 5%. The revision primarily reflects changes by the Central Bureau of Statistics to better account for Israeli companies’ overseas production in calculating gross domestic product (GDP).
The Bank of Israel projects growth of 5.6% this year and 7.5% next year, but excluding overseas production, those figures fall to 3.4% and 5.1%, respectively.
Moody’s also lowered its 2026 deficit forecast from 5.9% to 5% of GDP and its debt-to-GDP projection from 70.1% to 68.5%, citing stronger-than-expected revenues. It forecasts deficits of 4.8% in 2027 and 4.3% in 2028.
The agency expects the next government’s makeup to have no immediate impact on Israel’s credit quality, given broad policy similarities among the parties.
