The announcement of a ceasefire between Israel and Hamas removes one of the key uncertainties about the outlook for Israel’s economy and we maintain our forecast for a rapid recovery in GDP to take hold from Q2 onwards, inflation to remain low and the shekel to gradually appreciate over the coming years. But given the weakness in the economy in Q1, we have revised down our GDP growth forecast this year from 7.0% to 5.5% and we also think the balance of risks are skewed towards higher inflation.
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