Photo: Alisdare Hickson / Wikimedia Commons (Public domain)
Israel Market Drops Amid Inconclusive Election Results
Israel's benchmark stock market experienced a sharp decline following parliamentary elections that failed to produce a clear winner. The Tel Aviv 125 index fell by as much as 3.5 percent during early trading on Wednesday as investors reacted to the ambiguous political outcome of the country's first election since the conflict in Gaza began.
Exit polls and early tallies indicated that neither Prime Minister Benjamin Netanyahu’s right-wing coalition nor the opposition bloc led by Yashar figure Gadi Eisenkot secured a parliamentary majority in the 26th Knesset. Data published by Israeli media with more than 76 percent of the votes counted by 09:30 GMT showed Netanyahu's coalition tracking toward 54 seats, while the opposition bloc headed by Eisenkot was on course for 47 seats. A total of 61 seats is required to form a majority in the unicameral parliament.
Economic Performance and Forecasts
Despite operating on a war footing over the preceding three years, Israel's economy has maintained high activity levels, supported by investments in the local technology sector. Government figures indicate that gross domestic product grew by 2.9 percent in 2025 and 3.2 percent during the first half of 2026.
Economic indicators and central bank projections reflect continued growth:
- The Bank of Israel raised its full-year 2026 GDP growth forecast to 5.6 percent, increasing it from a previous estimate of 4 percent.
- The upward revision was attributed to heightened production levels by Israeli companies operating overseas.
- The central bank projected that GDP growth could reach 7.5 percent in 2027, outpacing growth estimates for advanced economies including the United States, United Kingdom, Germany, and Japan.
Source: Israel’s stock market drops as exit polls show no clear election winner