The Ministry of Finance recently unveiled a three-year budget plan for the years 2025-2027, revealing that Israel’s economic growth rate for 2025 is expected to be 4.6%, lower than the previous forecast of 5.6%. Additionally, the government budget deficit is projected to be 5.2%, a significant difference from the 1.75% that was initially expected by law.
One key area where there will be a noticeable impact is in the cost of servicing public debt, which is set to increase by 6.5 billion shekels in 2025 and a further 12 billion shekels by 2027. These changes highlight the challenges that the government will face in managing its finances over the next few years.
It is important to note that these projections are contingent on the optimistic assumption that the ongoing war will come to an end before 2025. This suggests that there is a level of uncertainty surrounding the future economic outlook, and further adjustments may be necessary depending on how events unfold in the coming years.