Prime Minister and Minister of Finance. They don't stop saying how strong the economy is and how much it won't be harmed by the reform. The International Monetary Fund thinks differently (Photo: Flash 90, Jonathan Zindel)
The Israeli economy suffered a prestigious blow today, when the International Monetary Fund cut its forecast for economic growth in Israel in 2023 to 2.5 percent, instead of 2.9 percent.
"Israel's economic performance in 2022 was astounding. Public debt to GDP has fallen rapidly to pre-Covid levels and international reserves are plentiful," the IMF said in a statement. "Economic activity is expected to slow and then converge to its potential."
And what other danger affected the growth outlook? The IMF did not hide its assessment: "The ongoing uncertainty surrounding judicial reform poses a notable negative risk to growth. In the absence of the emergence of a politically viable and sustainable solution, ongoing uncertainty could significantly raise the cost of risk in the economy, worsen financial conditions, and halt investment and consumption, with potential implications for growth,
even in the long term."
Recall that this coming weekend, the S&P rating agency is supposed to publish Israel's credit rating, and there is concern that this may be adversely affected as a result of the IMF's assessment of Israeli growth.
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