- Israeli stocks, as measured by the BlueStar® Israel Global Index (BIGI®), rose by 23.63% in Q2 2025, leading the index to all-time highs.
- Israeli Technology stocks rose strongly in Q2 2025, up 15.24% as measured by the BlueStar® Israel Global Technology Index (BIGITech®).
- Consumer-price growth has eased: the Bank of Israel projects headline inflation at 2.6 % for 2025, down from 3.2 % at end-2024. The Monetary Committee kept the policy rate unchanged at 4.5 % at its July 7, 2025 meeting, stressing that supply bottlenecks linked to the conflict still pose upside risks but hinting at possible cuts once pressures subside.
- The Bank of Israel Research Department now expects GDP to expand by 3.3 % in 2025 and to accelerate to 4.6 % in 2026, reflecting a gradual rebound in private consumption and investment after last year’s slowdown.
- Despite offsetting measures, the 2025 deficit is now forecast at about 4.7 % of GDP, above the government’s 4.4 % target, as higher defense spending and tax-related revenue shortfalls weigh on the budget. The Bank of Israel has urged lawmakers to pass the budget without additional spending increases and to adopt offsets that would stabilize the debt-to-GDP ratio.
- Investor confidence has improved: five-year CDS on Israeli sovereign debt fell to 76 bp, the lowest since before the October 2023 attacks, and government-bond yields have retraced accordingly, though both remain modestly above pre-war levels.
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