The prediction marks a substantial increase from April, when the fund projected that Israel’s GDP would grow by 3.5% this year.
By Shula Rosen
The International Monetary Fund raised its forecast for Israel’s economic growth in 2026 to 4.5% Tuesday, a full percentage point above its previous projection, while maintaining a more cautious outlook than the Bank of Israel for 2027.
The revised estimate was published in the IMF’s October 2026 World Economic Outlook and marks a substantial increase from April, when the fund projected that Israel’s GDP would grow by 3.5% this year.
Israel’s economy expanded by 3.5% in 2025, according to the IMF. Under the fund’s latest forecast, the pace of growth would accelerate by a full percentage point in 2026 before easing slightly the following year.
For 2027, the IMF left its previous projection unchanged at 4.4%, putting expected growth just below its revised estimate for the current year.
The IMF figures differ from forecasts published by the Bank of Israel’s Research Department in July.
Central bank researchers projected GDP growth of 4% in 2026, half a percentage point below the IMF’s latest estimate.
For next year, however, the gap between the two forecasts moves in the opposite direction. The Bank of Israel’s Research Department expects economic growth to accelerate to 5.5% in 2027, compared with the IMF’s projection of 4.4%.
That leaves the IMF 1.1 percentage points below the Bank of Israel’s forecast for 2027, even as the international organization projects stronger growth than the central bank researchers expect in 2026.
The IMF also lowered its inflation outlook for Israel alongside the upward revision to this year’s economic growth forecast.
Inflation is now projected at 1.8% in 2026, down from the 2.3% rate the IMF had previously forecast. The change represents a reduction of half a percentage point in the fund’s inflation estimate.
Taken together, the IMF’s latest figures project faster economic expansion in 2026 than it anticipated in April, followed by a slight moderation in growth in 2027.
The Bank of Israel’s July projections, by comparison, anticipate slower growth this year followed by a stronger acceleration next year.
Do You Love Israel? Make a Donation - Show Your Support!
Donate to vital charities that help protect Israeli citizens and inspire millions around the world to support Israel too!
Now more than ever, Israel needs your help to fight and win the war -- including on the battlefield of public opinion.
Antisemitism, anti-Israel bias and boycotts are out of control. Israel's enemies are inciting terror and violence against innocent Israelis and Jews around the world. Help us fight back!