Global credit rating agency Standard & Poor's (S&P) expects the Israeli economy to record 0% growth in 2024, which means a contraction in the per capita GDP, according to its latest report.
The agency believes that the Israeli economy will not begin to recover until 2025 with modest growth estimated at 2.2%.
The agency expects the Israeli war on Gaza and Lebanon to continue until 2025, which may hinder the recovery of the Israeli economy until 2026. In this context, Standard & Poor's downgraded Israel's credit rating last month, with a negative future outlook.
The agency estimates that Israel’s fiscal deficit will reach 9% of GDP by the end of 2024, and is expected to remain at high levels of 5% to 6% through 2027. It also expects net government debt to rise to 70% of GDP by 2027, an increase of 12% compared to 2023.
If the war continues and causes further damage to Israel’s economic growth and financial situation, the agency warned that it may downgrade its credit rating within the next 24 months.
The agency also expects Israel’s current account surplus to reach 3.3% of GDP on average between 2024 and 2027.
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