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| Citigroup believes that Israel's growth prospects under Prime Minister Benjamin Netanyahu are facing many difficulties. (Source: Shutterstock0 |
Citigroup has cut its forecast for Israel's economic growth to 3.1% in 2023 and 2.8% in 2024, citing the negative impact of the country's judicial reform plan. Citigroup's previous forecast for Israel's economic growth this year and next year was 3.3%.
In a new economic outlook note, Citigroup expert Michel Nies said: “In addition to judicial reform, a series of other government decisions can also have a strong impact on growth potential in Israel, including budget allocations, education policies… These decisions will affect aspects of the country and the economy, and spread to most asset classes.”
Previously, the Bank of Israel also forecast the country's Gross Domestic Product (GDP) growth at 3% for 2023 and 2024, lower than 6.5% in 2022.
Meanwhile, international credit rating agency S&P forecasts the Middle Eastern country's GDP growth to be only 1.5% this year.
The Israeli government’s judicial reform plan to reduce the power of the Supreme Court is causing a wave of protests in the country. Political instability has weakened the local currency, affecting investment in the technology sector and making business people nervous.
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