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The economic risks of Israel’s new government

Concerns over democratic backsliding and an escalation of the Israeli-Palestinian conflict associated with Israel’s new far-right government won’t necessarily mean that foreign investment into Israel dries up or that the economy suffers in the near term. But there is a clear risk that Israel’s long-run growth potential is weakened. And, in the near-term, a shift to looser fiscal policy could keep inflation higher for longer. 

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