IMF warns ‘uncertainty’ over judicial reforms may harm growth

The International Monetary Fund praises Israel’s “remarkable economic performance” in 2022, but warned “uncertainty” over controversial judicial reforms may harm growth.

After GDP increased by 6.5 percent in 2022, growth would likely “slow down this year as it returns to potential over the medium term,” the IMF’s Executive Board says in a statement released as part of an annual appraisal of the country’s economy.

According to the IMF’s forecast, growth is expected to fall to 2.5% this year.

The slowdown is caused by several factors including high inflation — 5% in 2022 — and the right-wing government’s now-paused controversial legal reforms, which have brought tens of thousands of protesters onto the streets of Tel Aviv and other cities.

“Uncertainty created by the proposed judicial reform could have a negative impact on the economy,” the IMF said, calling for a “politically sustainable solution.”