The OECD expects Israel to pull in growth rates of 4.8% and 3.4% for 2022 and 2023. That is about 10% above the average for the rest of the group, and thus surely a sign of competence. Even better, this forecast is in line with Fitch’s belief that the underlying factors of the local economy are stable, despite Ukraine et al.

So where’s the proverbial “but”?

Since its foundation in 1948, only briefly has Israel been governed by a party with a majority in the Kenesset (Parliament). And just when you think that the coalition political back-stabbing could not reach an even lower point, along comes a new crisis.

Certainly, June 2022 resembles such a watershed. The current government has lost its majority in the Kenesset. Yet the opposition, led by Netanyahu, cannot replace it. New elections are not a certainty. Where to next? I don’t know.

But what is certain is that financial markets do not like uncertainty! And Israel is heading right slap into a mess.

Analysts have already started to predict a slowdown – higher interest rates, established overseas markets closing their doors, higher energy prices, and more. Just as worrying is that in the past, the slack has been taken up by the hightech sector. However, for the first time in over two decades, the Israeli tech sectors are showing signs of tiredness.

Add in a lack of political direction from the centre, and the concern levels are beginning to mount. Israel, an economic powerhouse, is in danger of losing is status of ‘being all right despite everything’.

No – it is not all doom and gloom.

• Israel is signing significant new trade agreements, particularly with Arab States.
• Unemployment remains low at 3.4%, and the state budget has not been so balanced since the global credit crunch of 2008.
• Wierdest of all: The EU is looking to Israel for helping in resolving its gas shortage due to the Ukraine war. Compare that line to the news of the 1970s and the oil embargos! The upshot will be a very healthy bonus for the Ministry of Finance in Jerusalem.

The political instability will not be resolved immediately. If there are to be elections, they may not be held for months. If a new coalition is formed, it is very likely to face similar challenges to the current incumbents.

And that leads Israelis fighting for themselves, rather than be guided by politicians, who are currently acting like selfish children.