Highlights
- Israeli stocks, tracked by the BlueStar® Israel Global Index (BIGI®), ended 2025 up 38.63%, while Israeli technology stocks (BIGITech®) posted a 14.34% gain.
- Launched in Q4 2025 to track Israel’s defense sector, the MarketVector Israel Defense Industries Index (MVIDI) ended the year up 150.25%.
- The BOI’s Monetary Committee cut the policy rate to 4.0% on January 5, 2026, marking the start of an easing cycle as inflation pressures cooled.
- Annual inflation was 2.4% (November CPI), down after a 0.5% monthly decline, and the Bank noted expectations for a temporary uptick in December followed by a move back toward the midpoint of the 1–3% target range.
- The BOI Research Department now estimates GDP grew 2.8% in 2025 and forecasts 5.2% growth in 2026 and 4.3% in 2027, assuming the ceasefire continues and conditions remain relatively calm.
- Labor-market constraints remain, but the BOI highlighted early easing in supply restrictions, including improved participation/employment rates, fewer reserve-duty absences, and slower wage growth in the business sector, while noting supply constraints should unwind only gradually.
- The shekel strengthened materially since the prior decision, up 3.1% vs. the USD, 1.5% vs. the EUR, and 2.2% in nominal effective terms, which the BOI cited as part of the backdrop to moderating inflation.
- The Tel Aviv Stock Exchange (TASE) moved to a Monday to Friday trading schedule in the first week of January. This long-awaited move is meant to better align Israeli local stock and bond trading with global capital markets.
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