Shekel strengthens, jobs move abroad: Israel's twin-track economy

Bank Leumi raises $1 billion in CoCo bonds as Bosch shuts AI centers, reflecting a growing divide between capital inflows and high-tech job flight.

Shekel strengthens, jobs move abroad: Israel's twin-track economy — Bank Leumi completed an international issuance of CoCo bonds totaling $1 billion this morning, receiving $5.2 billion in demand—5.2 times the amount raised.[^1] The move capitalizes on a strengthening shekel, which traded at 2.86 to the dollar, up 1.2% from yesterday's representative rate.[^2] But the same currency strength that makes Israeli bonds attractive to foreign investors also makes Israeli workers more expensive for dollar-earning high-tech companies, accelerating the relocation of jobs abroad.[^3] German industrial conglomerate Bosch is liquidating its artificial intelligence research centers in Tel Aviv and Haifa by the end of June, laying off about 30 highly qualified specialists.[^4] The closure follows a broader trend: a recent analysis notes that companies prefer hiring cheaper workers overseas rather than cutting wages and harming their attractiveness.[^3] Meanwhile, the OECD forecasts Israel's GDP growth at only 3.3% in 2026, with the budget deficit rising to 5.3% of GDP and debt-to-GDP ratio jumping to 71%.[^5] Yet other indicators point to continued investment. Energy company OPC signed a $1.2 billion financing agreement with Bank Leumi to build a combined-cycle power plant in Hadera with a capacity of 850 megawatts.[^6] The Transport Ministry will allocate 600 million shekels for infrastructure restoration in northern communities.[^7] And El Al announced the resumption of direct flights to San Francisco starting October 25, 2026, with a minimum round-trip economy fare of $1,199.[^8] The question is whether these large-scale projects can offset the steady erosion of high-value tech jobs. Iran strikes Gulf states, Kyiv hits St. Petersburg, Trump insults Netanyahu — The Islamic Revolutionary Guard Corps carried out a massive overnight attack using drones and ballistic missiles on Kuwait and Bahrain, hours after the US struck an oil tanker in the Strait of Hormuz.[^1] Iran's Foreign Ministry condemned the US attack on Qeshm Island and held Kuwait and Bahrain responsible for supporting the US.[^2] Lebanese sources report an Israeli drone strike on a motorcycle on the Halda road