OECD Forecasts Slower Growth for Israel in 2024, Post Conflict

By Aryeh Stern

The Organization for Economic Cooperation and Development (OECD) has projected a downturn in Israel’s growth for 2024, due to the war with Hamas. This analysis forecasts a temporary economic slowdown, with Israel’s GDP expected to decrease to 1.5% in 2024, down from 2.3% in 2023. The report anticipates a recovery in 2025, forecasting a growth rate of 4.5%.

Moreover, the OECD predicts Israel’s fiscal deficit to widen, reaching 5.2% of GDP by 2024, and anticipates the debt-to-GDP ratio to rise to 65% by 2025. These projections differ from those of the Bank of Israel, which forecasts a fiscal deficit of 3.7% by the end of 2024 and a debt-to-GDP ratio of 66% in the same year. The OECD highlighted the uncertainty surrounding the conflict’s economic impact, assuming it would primarily affect the last quarter of 2023 and the initial part of 2024, contingent upon no further escalation.