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S&P: Israel's Growth Boosted by Overseas Production, Security Risks Remain
Credit rating agency S&P has raised Israel's growth forecast to 5.5% this year and 7% in 2027, but noted that a significant part of this increase stems from the inclusion of overseas production by Israeli companies.
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What happened
- 01S&P raised Israel's growth forecast to 5.5% this year and 7% in 2027.
- 02A portion of Israel's projected growth is due to including overseas production by companies like Mellanox.
- 03S&P's stable outlook assumes military conflicts will remain contained despite Iran tensions.
- 04Security risks have had a limited impact on Israel's economy so far.
- 05Israel may enter 2027 without an approved budget, operating under an extension.
- 06Defense spending is expected to exceed 7% of GDP this year.
The agency maintains a stable outlook, assuming military conflicts remain contained despite ongoing tensions with Iran. Security risks have had a limited impact on the economy so far, partly due to the strong high-tech sector and remote work capabilities. S&P warns that operating without an approved budget and potential reductions in U.S. aid could pose future challenges.
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