The Organization for Economic Co-operation and Development (OECD) has published an updated forecast in which it has lowered its forecasts for the growth rate of the Israeli economy in 2024 and 2025.
According to the new forecast, Israel’s GDP growth in 2024 will be 0.6%, and the forecast for 2025 has been reduced from 4.6% to 2.4%.
The inflation forecast has been raised from 2.5% to 3.1% in 2024 and to 3.6% in 2025.
The OECD also does not believe in the government’s ability to keep the 2025 budget deficit within the stated limits of 4.4%, and predict that it will be 5.7%.
“The government should emphasize long-term fiscal changes, such as eliminating benefits including VAT, or cutting subsidies that encourage absenteeism, rather than temporary measures such as raising tax rates or freezing benefits,” the report said.