Weekly report, August 24, 2026: Nvidia boosts Israel’s GDP growth, rate cut remains a close call, Netanyahu strengthens his grip on Likud
New CBS data show a widening gap between Israel’s headline GDP and domestic growth, largely reflecting Nvidia-related production abroad. We have revised our 2026 forecast, with GDP growth at 4.2% and exports rising 10.2%. The weaker domestic picture strengthens the case for monetary easing, but following Governor Amir Yaron’s cautious comments, we expect the Bank of Israel to keep rates unchanged in September. Political and geopolitical uncertainty remains elevated ahead of the October election.
What to watch for this week:
* The coming week will provide several additional indicators on the state of the Israeli economy. On Tuesday, August 25, the CBS will publish the detailed July Labor Force Survey, including employment by industry and occupation. The headline figures have already been released and continue to point to a tight labor market, despite some modest easing in July.
* Also on Tuesday, the CBS will publish hotel overnight stays for January-July 2026. The summer inbound tourism season has effectively been lost, extending the severe crisis facing Israel’s tourism industry since the war.
* On Thursday, August 27, we will receive industrial-production and business-sector-revenue data for June. These figures will provide a more detailed picture of activity at the end of the second quarter, which, as mentioned above, was exceptionally strong.
* Finally, on Sunday, August 30, the CBS will publish services exports data, with particular attention to high-tech services. High-tech exports have remained very strong and continue to provide major support for economic growth and Israel’s balance of payments.
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