The American investment bank is of the opinion that the Israeli GDP will grow by 4.8% this year. Morgan Stanley analyst: “a significant slowdown in the US economy could have a significant impact on Israel”
US investment house Merrill Lynch & US investment bank Morgan Stanley issued last week report on prospects for the Israeli economy and the Israeli shekel.
Merrill Lynch's report gave a generally positive assessment of the Israeli economy in the aftermath of the fighting in Lebanon.
Merrill Lynch analyst Mehmet Simsek wrote in his detailed analysis: "We believe that the shekel’s recent resilience in the face of the Israeli war against Hezbollah in Lebanon points to the country’s underlying economic strengths,"
A Morgan Stanley analyst for Middle East and North Africa Serhan Cervik, wrote that, "The shekel is astonishing – the Israeli economy and financial markets show exceptional resilience."
The American investment bank is of the opinion that the Israeli GDP will grow by 4.8% this year.
Merrill Lynch's Simsek noted, however, that he sees three clouds on the Israeli economic horizon. "First, investors are concerned about the impact of the war on political stability. Second, there is uncertainty as to whether the government will be able to maintain its pre-war fiscal stance. Third, strong domestic and external demand has underpinned solid economic performance. A slowdown in US activity may reduce external demand."
"Prior to the war, the Israeli economy was growing at its fastest pace since 2000. We expect the impact of the war to prove temporary. However, a significant slowdown in the US economy could have a significant impact on Israel, which is a small open economy, with some 35% exports destined to the US," Simsek notes.
