Israel's economy slows down: how it could hit citizens
New economic data indicates a slowdown in the Israeli economy. Mizrahi Tefahot's chief strategist Yoni Fenning noted weak revenue figures for July. One reason cited is the increase in international flights, shifting Israeli spending abroad. In a worst-case scenario, this could impact the labor market and citizens' incomes.
New economic data has revealed signs of a slowdown in the Israeli economy that could affect citizens' incomes and spending. Mizrahi Tefahot's chief strategist Yoni Fenning highlighted weak revenue figures for July. According to the bank's assessment, this trend could worsen the overall picture of economic activity for the third quarter. One reason for the weakness is the sharp increase in international flights: the rise in overseas travel means that part of Israeli consumer spending is shifting abroad, while local businesses receive less money. In a worst-case scenario, prolonged decline in domestic demand will primarily affect businesses dependent on consumer spending—restaurants, stores, entertainment, and tourism. For Israelis, this potentially means a more difficult labor market: the number of new job openings may grow more slowly, and employers will have fewer opportunities to raise wages. An additional risk remains the situation with interest rates: rising energy costs could influence inflation, limiting room for rapid rate cuts. For families with loans, this means maintaining expensive financing, including mortgages. However, credit card data for September indicates some recovery in consumer activity. Mizrahi Tefahot expects this positive trend to continue through the end of the year.