The Israeli economy is facing a significant hit to growth projections as a result of the Middle East conflict — but its central bank chief is hopeful that a rapid resolution to the wars in Lebanon and Iran can help ease the shock.
Speaking with CNBC’s Karen Tso at the IMF-World Bank spring meeting in Washington, D.C. on Thursday, Amir Yaron, governor of the Bank of Israel, acknowledged there is still “huge uncertainty” around the duration of the conflict, despite recent signals that a resolution could be in sight.
Israel and Lebanon agreed an immediate 10-day ceasefire Thursday following talks in Washington between officials from both countries.
Israel has slashed its growth expectations for 2026 from 5.2% to 3.8% as a result of the hostilities in the Middle East.
But Yaron — who was speaking shortly before U.S. President Donald Trump announced the temporary truce on Thursday — believes growth can rebound to 5.5% in 2027, should those conflicts be resolved.
