Capital Market

In a recent report published by accounting and consulting firm PwC Israel, the state of the Israeli high-tech sector in 2023 reveals a significant downturn, with exits amounting to $7.5 billion—a stark 56% decrease compared to the previous year. This marks a substantial 91% decline from the record-breaking $82.5 billion in exits witnessed in 2021

Bank of Israel abruptly ceased its dollar sales in November after initiating a plan to sell $30 billion to fortify the shekel amidst the ongoing conflict. The bank had previously sold $8.2 billion in October, but the volume plummeted to a mere $300 million the following month

In a significant move to bolster its budget for 2024, the Ministry of Finance in Israel is contemplating the cancellation of the longstanding VAT exemption on purchases from abroad. The 17% automatic discount on overseas acquisitions is set to expire soon, marking a potential shift in taxation policy. This decision is part of broader efforts to tighten financial belts and raise taxes, but it has sparked a heated debate among stakeholders

the National Insurance's poverty report for Israel, published on Thursday, sheds light on the grim socio-economic situation prevailing in the country. The report underlines that income inequality and poverty rates in Israel are alarmingly high on the global scale

In response to the economic challenges posed by the ongoing war since October and rising government deficits, the Bank of Israel has decided to cut interest rates by 0.25% to 4.5%. The move comes as the central bank acknowledges the significant economic consequences of the conflict, emphasizing the high level of uncertainty regarding its scope and duration. Market Disagreement and Expectations: The decision has sparked differing opinions in the capital market, with some predicting two consecutive interest rate cuts. Modi Shafferer, market strategist at Bank Hapoalim's trading room,...

In a sobering revelation, the Ministry of Finance anticipates a staggering 6.5% deficit of the GDP for the year 2024, attributing the alarming shortfall to heightened expenses associated with financing ongoing military efforts. The updated draft of the budget proposal, yet to be officially distributed, sheds light on the financial predicament gripping the nation

Despite a 0.1% decrease in the Consumer Price Index (CPI) for December, Israel concluded 2023 with a yearly inflation rate of 3%, precisely hitting the upper limit of the government's targeted range (1%-3%). This marks a notable slowdown compared to 2022, which saw a substantial 5.3% increase in prices

The IMF economists express concerns that the conflict in Gaza could escalate further, and continued attacks by the Houthis in the Red Sea, a crucial route for 11% of world trade, could disrupt supply chains and impede the global recovery. The ongoing war in Ukraine adds to the risks, potentially causing spikes in food, energy, and transportation prices, which have already seen a sharp increase

Israeli government tabled the largest state budget in the country's history, totaling 582 billion shekels, before the Knesset, 21 days after its initial approval. This budget marks a significant increase of 68 billion shekels compared to the earlier 2024 budget set in May 2023. Notably, it includes substantial cuts across all government ministries except for defense and yeshiva budgets

After downgrading Israel's credit rating for the first time ever, the rating company Moody's also downgraded the rating of the five largest banks. The rating of the major banks - Hapoalim, Leumi, Mizrahi Tefahot, Discount and International - dropped one grade from A2 to A3 and they were assigned a negative outlook, similar to the state's. The downgrade of the banks is not surprising and was expected after the downgrade of the state. Moody's explains in its reasoning that the downgrade is related to the fear of the state's ability to support banks in a time of need, for the same reasons for...