Israel is optimistic about concluding several economic agreements with India in the coming months, though a full Free Trade Agreement (FTA) might take longer, according to Shmuel Abramzon, Chief Economist at the Ministry of Finance, Israel.In an exclusive interview with CNBC-TV18, Abramzon indicated that while a comprehensive FTA is still in the works, “Some agreements will certainly be concluded this year.” He elaborated that these discussions cover a wide range of areas, including creating a more stable environment for bilateral investments. Additionally, agreements supporting intergovernmental agency relations in areas like fintech and financial regulation are also being pursued.
Despite ongoing geopolitical challenges, Abramzon projected a positive outlook for Israel’s economy, forecasting around 4% GDP growth for the current year. He emphasised the “exceptionally strong fundamentals” of the Israeli economy, which he believes enable it to navigate the current period. He pointed to robust investor confidence, reflected in record stock market levels and a strong currency, as evidence of this resilience.
Innovation is set to drive deeper cooperation between India and Israel. Abramzon highlighted a wide array of sectors for collaboration, stating, “Anything involving innovation. This spans across various sectors, from agricultural, technological innovations to water technologies, and of course, cybersecurity and defence.” He noted that both nations face significant defence challenges, which also present opportunities for joint efforts.The Israeli Chief Economist underlined the importance of fiscal discipline, a long-standing strength for the nation. While acknowledging a temporary rise in defence spending due to current needs, he clarified that this would be a “one-time uptick” in 2025, potentially increasing defence expenditure by 3-4% of GDP. However, he stressed a commitment to reducing defence spending as a percentage of GDP over the medium to long term.
Despite ongoing geopolitical challenges, Abramzon projected a positive outlook for Israel’s economy, forecasting around 4% GDP growth for the current year. He emphasised the “exceptionally strong fundamentals” of the Israeli economy, which he believes enable it to navigate the current period. He pointed to robust investor confidence, reflected in record stock market levels and a strong currency, as evidence of this resilience.
Innovation is set to drive deeper cooperation between India and Israel. Abramzon highlighted a wide array of sectors for collaboration, stating, “Anything involving innovation. This spans across various sectors, from agricultural, technological innovations to water technologies, and of course, cybersecurity and defence.” He noted that both nations face significant defence challenges, which also present opportunities for joint efforts.The Israeli Chief Economist underlined the importance of fiscal discipline, a long-standing strength for the nation. While acknowledging a temporary rise in defence spending due to current needs, he clarified that this would be a “one-time uptick” in 2025, potentially increasing defence expenditure by 3-4% of GDP. However, he stressed a commitment to reducing defence spending as a percentage of GDP over the medium to long term.
Abramzon reiterated the economy’s resilience amidst conflict, asserting that “despite the very clear challenges that war and uncertainty bring, not only in Israel but also globally, we are still seeing very healthy economic activity.” This sustained activity underpins the positive growth projections for the year.
Watch accompanying video for entire conversation.
