Israel eyes $3 billion Wiz windfall to strengthen economy and cut deficit

Dr. Shmuel Abramzon, the Finance Ministry’s chief economist, highlighted the pending sale of Israeli cybersecurity firm Wiz to Google as a key factor for the country’s 2026 economic outlook during Calcalist’s Global Economics Conference on Thursday.

The Wiz deal, which has not yet closed, is expected to generate 10 billion shekels (approximately $3.06 billion), roughly half a percent of Israel’s GDP. “The Wiz deal is indeed very significant. The right approach when looking at one-time revenues is not to use them for permanent spending, but to reduce the debt,” Abramzon said.

Dr. Shmuel Abramzon, the Finance Ministry’s chief economist.

(Photo: Yariv Katz)

Despite the uncertainty around the deal, the Finance Ministry remains optimistic about Israel’s broader fiscal outlook. The ministry is projecting a deficit of 3.2% next year, with growth exceeding 5%, which could allow for a 1-2% reduction in government debt. “I very much hope that the government will approve a not-high deficit,” Abramzon said.

When asked about the surge in state revenues in recent years, Abramzon attributed part of the boost to strong capital markets and improved tax collection, including moves against black market capital. “We were very positively surprised by the revenues recorded by the state,” he said, noting that these gains helped the government avoid significant tax increases even amid slow economic growth.

On the broader economic outlook, Abramzon emphasized both opportunities and risks for Israel in 2026. “We see an economy emerging from two challenging years, with strong opportunities and risks. One of the most important factors is good policy, to strengthen government measures that allow monetary policy to encourage growth.”

He highlighted global opportunities, particularly in India, where Israel has signed an investment agreement and is working toward a broader trade deal. “India has enormous potential. It is growing above the global average and has a base of support for Israel that you do not always see in Europe,” he said. He also mentioned ongoing negotiations for an expanded trade agreement with the United States to create a stronger strategic economic partnership.

On domestic fiscal policy, Abramzon reiterated the Finance Ministry’s opposition to tax benefits, arguing that direct reductions in VAT and income taxes would be a more effective approach. “There are 1.5 billion shekels ($459 million) in tax benefits, and from time to time there is an appetite to add more. This is not the correct approach professionally. We would prefer to lower VAT and income tax rates,” he said.

Abramzon also commented on potential taxation of banks, noting that high profitability is partly driven by concentration and limited competition. “Taxation could be part of the solution, but it is not a long-term fix,” he said.

As Israel prepares its 2026 budget, the Wiz sale looms large, not only for its immediate fiscal impact, but as a signal of the country’s ability to attract global investment. “The right approach is to use one-time revenues responsibly and maintain fiscal discipline. That sends a clear message to markets about the government’s management and commitment to stability,” Abramzon said.