Gad Lior

The shekel weakens against the US currency, gaining support from an expected Iran-US agreement and Israel’s complications in Lebanon; the euro also rises

Proposal to lower the tax from 18% to 17% draws support from business groups, but Finance Ministry warns of nearly $3 billion budget hole

The Treasury says the demand is excessive, warning that tens of billions more for defense could force deep civilian cuts and strain Israel’s credit rating

Finance officials say meeting Defense Ministry’s full budget request would require a sharp tax increase, raising costs across Israel’s economy

Compromise avoids reopening 2026 state budget for now, after Treasury warned Defense Ministry’s full request could force sharp VAT hike

Economists see another rate cut as inflation cools and growth slows, though a weaker shekel and election-year budget risks could stay the central bank’s hand

Central bank bought more than $1 billion in June to support orderly currency markets, marking a second straight month of intervention as regional tensions weigh on the shekel

Brent crude climbs above $78, the dollar strengthens past 3.05 shekels and Tel Aviv stocks fall after tanker attacks in the Strait of Hormuz and US strikes on Iranian targets

The agency says Israel’s economy has remained resilient despite geopolitical shocks and forecasts 3.7% growth in 2026 and 5% in 2027 if ceasefires with Iran, Hezbollah and Hamas hold

June consumer prices were unchanged, while apartment prices fell 1% over two months and 2% annually, though rents rose sharply for new tenants