IMF lowers Israel growth forecast over regional tensions The International Monetary Fund has lowered its estimate for Israel's economic growth in 2026 to 3.5 percent, down from a previous forecast of 4.8 percent, citing regional tensions. In a report on Wednesday, the IMF said it also expects inflation to rise temporarily due to higher energy prices and supply constraints, despite the shekel appreciating to a more than three-decade peak against the dollar. "The elevated regional tensions are casting a shadow on Israel's economy," the IMF said, referring to conflicts with Iran, Hezbollah and Hamas.