Early parliamentary elections held yesterday are likely to result in a fifth term in office of incumbent PM Netanyahu. With almost all votes counted, his conservative Likud party is leading neck-and-neck with the centrist Blue and White alliance (both around 29%) of his main contender, ex-military chief Benny Gantz. But Likud and its right-wing allies are likely to be the largest bloc with around 65 seats in the 120-seat Knesset (the parliament). The political impact of the outcome could be continued and perhaps increased tensions between Israel and its foes in the region. Netanyahu, who is currently facing corruption allegations, made a crucial announcement during his campaign, suggesting a new government may annex parts of the occupied West Bank (those with Jewish settlements). The economic track record under Netanyahu is good. Real GDP grew by an average annual +3.6% over the past decade. We forecast growth of +3.1% in 2019 and +3.6% in 2020.
