The International Monetary Fund (IMF) stated that escalating tensions in the Middle East are leaving deep marks on the Israeli economy. For occupied Israel, whose 2026 growth forecast has been lowered from 4.8% to 3.5%, inflation risks are on the rise, while defense spending and labor shortages are weighing on the medium-term outlook.
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The International Monetary Fund (IMF) stated that escalating tensions in the Middle East are leaving deep marks on the Israeli economy. For occupied Israel, whose 2026 growth forecast has been lowered from 4.8% to 3.5%, inflation risks are on the rise, while defense spending and labor shortages are weighing on the medium-term outlook.