Israel: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Israel
IMF Staff Country Reports, June 15, 2023
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- Israel: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Israel
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Bibliographic details
- Published: June 15, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400246418.002
Economic outlook and growth projections
- Israel’s impressive economic performance continued in 2022.
- Economic activity is expected to decelerate in 2023 and thereafter converge toward its potential.
- IMF staff projects economic growth to slow to about 2.5 percent in 2023, as households’ purchasing power moderates and firms rein in investment.
- As domestic demand starts recovering from 2024, the growth rate is anticipated to converge toward its potential rate, estimated at about 3.8 percent, thus closing the output gap in the medium term.
- The external sector is projected to remain robust.
Labor market
- The labor market is expected to remain tight.
- The unemployment rate is expected to marginally increase.
Fiscal position and public debt
- Fiscal buffers are expected to be maintained.
- Public debt to gross domestic product is projected to decrease further and stay below 60 percent.
Policy recommendations and structural priorities
- Prioritize education reform to enhance potential growth.
- Improve the skills of minorities to foster an inclusive economy.
- Increase infrastructure investment, with emphasis on local transportation infrastructure to:
- Reduce congestion,
- Improve job accessibility, and
- Alleviate cost of living concerns.
Key statistics and explicit figures from the consultation
- Growth projection for 2023: about 2.5 percent
- Estimated potential growth rate: about 3.8 percent
- Public debt to GDP: projected to stay below 60 percent
- Reference year of recent performance: 2022
International Monetary Fund. Israel: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Israel.
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- 1isrea2023001