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The newly appointed President of the Manufacturers Association of Israel, Avraham (Novo) Novogrotzky, and the Chairman of the High-Tech Association within the organization, Alon Ben Tzur, have appealed to the Chairman of the Finance Committee, MK Hanoch Milwidsky, requesting an urgent discussion regarding the exceptional appreciation of the Israeli Shekel. In their appeal, the two warned that the damage to the competitiveness of Israeli exports, local industry, and high-tech development centers is evolving into a strategic crisis.
The alarming data: a 15% plunge in the dollar exchange rate. According to the association heads, the dollar's drop to a low of 3.09 NIS, reflecting an appreciation of approximately 15% over the past year, is creating immediate operational losses for exporters and factories. This situation is exacerbated by the continuous rise in local production costs, including wages, electricity, municipal taxes (Arnona), and rent.
Furthermore, the two noted that the imposition of a 15% tariff in the US on certain Israeli products is severely harming the ability to compete in the primary target market. They warn that without a "technological vaccine" model and a cash-flow safety net, multinational corporations may scale back their operations in Israel and relocate knowledge centers abroad.
GDP Impact Forecast: Loss of Billions
The letter presented a grim forecast based on Bank of Israel data, according to which the expected GDP for 2026 could shrink by 31.1 billion NIS due to the decline in exports. The direct impact on GDP is an expected decrease of 16.5 billion NIS, representing a loss of 0.77% of the economy's projected GDP for 2026.
In the high-tech sector, the two warn that the strengthening of the Shekel significantly increases wage costs in dollar terms, eroding the economic viability of maintaining development centers in Israel. "We are expected to see an acceleration in the relocation of activities abroad, damage to Israel's branding as the 'Startup Nation,' and a massive loss of tax revenue," the appeal stated.
The two are calling on the Finance Committee to work with the government to formulate an immediate national emergency plan: "Avoiding emergency measures could lead to a wave of layoffs, significant harm to the periphery, and the deterioration of the economy into a deep recession. The committee must be convened urgently to halt the crisis before it is too late."
