Overhaul could leach $42 billion out of Israeli economy in 3 years

Israel’s judicial overhaul is liable to cost the country $14 billion annually over the next three years, according to an Army Radio calculation based on a Bank of Israel forecast.

In a press release earlier Monday, BoI warned that should the changes to the judiciary go through, and “the perception of the public… is that the impact of the legislative changes will persist,” Israel could lose 2.8 percent of its gross domestic product annually over the next three years.

According to Army Radio, that figure would equal $14 billion a year, though the number is seen as highly speculative.

According to BoI, should the effects of the overhaul subside quickly, Israel will only lose 0.8 percent of its GDP per year over three years, whereas should the judicial crisis be resolved in a way that does not touch the economy, the GDP is forecast to grow 2.5% this year and 3.5% next year.

The economy grew by 6.5% in 2022, beating forecasts, and had initially been forecast to grow by a modest 2.8% in 2023 amid a global economic downturn.