This dashboard report presents ten charts documenting the global economic effects of the closure of the Strait of Hormuz. From surging oil, gas, and jet fuel prices, to disruptions in aluminum and fertilizer supply chains, and mounting pressure on the global food price index, the charts together point to a single vulnerability in the global economy that evolved into a catalyst for a multidimensional crisis. The charts will be updated weekly and will continue tracking effects likely to persist well after the fighting subsides, as...
In recent years, a profound shift has occurred in China’s economic involvement in Israel, which, since 2020, has been reflected in a sharp and sustained decline in both the volume of investments and the number of transactions. Chinese investment hit its lowest point in 2023, totaling only 39 million NIS, about 0.12% of all foreign investment in Israel that year. This trend stems from several factors: intensifying great-power competition and US pressure to limit Chinese involvement in sensitive sectors; the establishment of Israel’s...
The campaign against Iran has expanded to the economic front, centering on Tehran’s attempts to harm the global energy market in order to force the United States to end the fighting. Yet an analysis of market conditions reveals a surprising picture. Although the global economy is showing resilience and can absorb rising prices in the short term, the real point of vulnerability may lie elsewhere. America’s allies in the Gulf could be forced to halt oil and gas production if storage facilities fill up. Should that be the case, the main...
US military aid to Israel has, for decades, constituted a central pillar of the strategic relationship between the two countries and a foundational component of Israel’s national security concept. Beyond its financial scope, this aid serves as an institutional, political, and symbolic anchor of the alliance between Jerusalem and Washington, embodying the United States’ commitment to preserving Israel’s qualitative military edge in a challenging regional environment. The current multiyear agreement (2019–2028), signed in 2016, sets...
This article reviews and analyzes trends in trade between Israel and China in 2024, set against the backdrop of the Swords of Iron war and the ongoing trade war. Three key developments stand out compared to 2023. First, imports from China rose approximately 20% in 2024, following an 18% drop from 2022 to 2023. Israel continues to import more goods from China than from any other country, and in 2024, about 15% of all goods imported to Israel came from China. Second, Israeli exports to China continued to decline. In 2024, Israeli...
The risks to Israel’s economy have risen in recent weeks, along with the likelihood of a financial crisis in Israel. This is due to three events that occurred simultaneously: the end of the ceasefire in Gaza and the resumption of fighting, the approval of a problematic state budget for 2025, and political instability reflected in the dismissal of gatekeepers and the return of the judicial overhaul. All these raise many questions regarding the fiscal responsibility of the Israeli government in general, and the financing of the war in...
This article discusses the Nagel Commission report on the security budget and force buildup, which was recently submitted to the prime minister, and compares it to reports issued by previous commissions that have addressed this issue (the Brodet Commission and the Locker Commission). The analysis highlights flaws in the broad mandate given to the commission, its timeframe, the validity of some of its conclusions—both in terms of concept and force building—as well as its omission of critical fundamental issues. While adopting the...
The 2025 state budget, set at NIS 607 billion, was approved by the government on November 1 after contentious debates within the coalition. The government aimed to present a budget that would support the country’s growing security needs and the populations affected by the war while also reducing the deficit and encouraging economic growth. In practice, the approved budget should meet Israel’s security needs, but it is doubtful whether it will address the country’s broader economic needs. The unwillingness to significantly cut...
The tightening of relations between China and Iran is considered one of the main factors preventing the collapse of Iran’s economy, which has been subject to sanctions since the United States withdrew from the nuclear agreement in 2018. This improvement in relations began at the height of the COVID-19 crisis when the two countries signed a long-term cooperation agreement aimed at strengthening their economic ties in the following years. However, in practice, this partnership has been very limited and fundamentally asymmetric. Despite...
In the tenth month of the Swords of Iron war, Israel stands at a crossroads in terms of the continued fighting in the Gaza Strip and the broader campaign against Iran and the “Axis of Resistance,” which are directly involved in the conflict. Every decision about the future will undoubtedly have significant economic consequences, especially considering that the projected budget deficit for 2024 is expected to significantly exceed the forecast underlying the current state budget. This is further compounded by the impact of the war on...
In the seven months since the Hamas attack on October 7, the onset of the war in the Gaza Strip, and increased security tension on several fronts, stable relations between Jewish and Arab citizens of Israel have been maintained, including in the mixed towns and cities. Despite fears voiced by some in the political and security establishment that the war could ignite widespread clashes between Jews and Arabs, it has not happened—even during the traditionally tense month of Ramadan and the Eid al-Fitr holiday. Most Arab citizens of...
In 2023 there was a sharp decline in the trade of goods between Israel and China, after years of continuous increases, in which China became a significant trade partner for Israel. While the decline could be attributed on the surface to the war in Gaza and the broader threat posed by the Houthis to international trade, these events primarily impacted trade in the final quarter of the year. However, the decline in trade between Israel and China was consistent throughout the year. This paper proposes three possible explanations for...
