Controlling defense budget is next Israeli government's main economic issue, Bank Hapoalim CEO says

Controlling the defense budget will be the central economic challenge for the next Israeli government, Bank Hapoalim CEO Yadin Antebi warned. He emphasized that the scale of defense spending will heavily influence the standard of living for Israelis in the coming years.

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It is clear that the central challenge of the next government, when it wants to build the budget, among the other challenges it will need to deal with, is first of all control over the defense budget. The size of the defense budget will very much determine the standard of living of the Israeli public in the coming years.

Speaking at EY's annual real estate conference, Antebi presented a broad overview of Israel's economy during the recent war and the state of its real estate sector. He noted that the Israeli economy entered the conflict from a strong position, characterized by low unemployment, low inflation, and low leverage rates in both the private and public sectors. These conditions provided the economy with the necessary resilience to operate despite wartime challenges.

Antebi highlighted the resilience of Israel's business sector, with companies quickly resuming activity after the initial shock of the war. He observed that within two to three months, the economy had largely returned to regular functioning. However, he also stated that Israel's current macroeconomic picture appears less favorable than anticipated at the outset of the conflict, noting that the expected "new Middle East" with a different economic and geopolitical equilibrium has not materialized.

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I do not want to say ‘a new Middle East,’ but there were expectations here that the situation would look different, with a different economic and geopolitical equilibrium. That did not happen, and as it currently appears, it is also not happening.

Drawing on Bank Hapoalim's century-long history, Antebi explained that the bank's extensive customer base across all sectors provides a unique perspective on economic cycles. He pointed out the significant growth in the defense industries, which were once considered less interesting but are now among the most prominent. This historical perspective, he suggested, offers valuable insight into navigating economic fluctuations.

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As a bank that has existed for more than 100 years, we have customers in every sector, and we have constantly seen many ups and downs in the different sectors. For example, the defense industries were almost uninteresting until a few years ago, and today they are one of the most interesting industries.