The International Monetary Fund (IMF) projects a significant rebound in Israel's economy, forecasting a growth rate of 4.8% in 2026, up from 2.9% in 2025, following a ceasefire in Gaza. According to Business Recorder, this growth is attributed to 'pent-up private consumption and a rebound in investment,' despite a decline in government consumption. The IMF highlights that the two-year conflict with Hamas has left a 'substantial legacy of high defense spending,' which, along with labor supply constraints due to extended military mobilization and reduced availability of non-Israeli workers, poses challenges to the medium-term economic outlook. The Times of Israel echoes this sentiment, noting that while the economy has shown 'notable resilience,' the potential for renewed regional tensions remains a significant risk to growth.