Strong Q4 balance of payments supports the shekel

ISRAEL - In Brief 17 Mar 2026 by Sani Ziv

---

Israel’s external accounts strengthened in Q4 2025. The current account surplus rose sharply to $3.4 billion, following two relatively weak quarters (around $0.6 billion each). The key driver from an FX perspective, the goods and services balance, improved significantly, with the surplus widening to $6 billion, up from $2.8 billion in Q3. This reflects a sharp increase in the services surplus, driven primarily by strong high-tech exports, alongside a moderation in the trade deficit. At the same time, net FDI inflows picked up to $4.5 billion in Q4, compared with $3.0 billion in the previous quarter, pointing to continued foreign investor confidence. Overall, Israel’s macro fundamentals remain supportive of a strong shekel, despite weakness linked to geopolitical uncertainty and/or declines in global equity markets.Israel’s external sector remains resilient, with the current account surplus jumping to about $X billion in Q4 2025. Balance-of-payments data released yesterday show that the current account recorded a surplus of about $3.5 billion in the fourth quarter, while the goods and services account posted a surplus of around $6 billion. This follows a temporary slowdown in the second and third quarters, where the current account surplus narrowed to about $0.5 billion, although these figures were also revised upward compared with the previous estimate. We focus mainly on the goods and services balance, which better reflects trends in exports and imports. In 2025 as a whole, the surplus stood at about $13 billion, broadly similar to the levels recorded in 2023 and 2024. Exports increased in both goods and services by about $6 billion and $9 billion, respectively, with ...