Israel in September 2026: the most important developments in economy
In September 2026 Israel's economy was shaped mainly by trade measures from European countries and Canada against Israeli West Bank settlements. On 8 September the United Kingdom, France and Canada announced trade bans on settlements, after London signalled the plan on 7 September. The UK also imposed sanctions on settlers and settlement entities over violence in the West Bank. Critics in Britain called the measures a stunt, while supporters said they were needed to address settlement expansion. Prime Minister Benjamin Netanyahu said Labour restricted trade with Israel to protect Keir Starmer's seat. Norway moved to criminalize trade with settlements, and the Netherlands banned imports from them. Reports on 18 September said the British measures clash with US anti-boycott laws, leaving firms that operate in both countries with competing legal obligations. On 29 September a report said the UK had widened its arms export ban on Israel from 30 to more than 80 licences. Luxembourg also ended its role in approving Israel Bonds prospectuses for European markets.
A second theme was water and energy. Most of Israel's desalination plants shut down at the end of August, water restrictions continued on 1 and 2 September, and two plants partially restarted on 2 September. By 18 September the Water Authority was preparing for several weeks of reduced output. Fuel prices reached a record: on 6 September Finance Minister Bezalel Smotrich approved a temporary excise cut that lowered the pump price by 50 agorot per litre, and at month's end gasoline was set to hit NIS 8.27 per litre, with Smotrich moving to cut the fuel tax again.
In business and aviation, Volkswagen signed a deal to turn a factory into an Israeli defence hub, with Iron Dome to protect the Osnabrück plant. Several major US and European airlines resumed flights to Tel Aviv, and flights to Morocco reopened. PayPal is laying off nearly a quarter of its employees in Israel, and authorities halted the sale of the shipping company ZIM to a German firm. A flydubai flight to Tel Aviv was diverted on 30 September after an incident between pilots.
by WorldBrief & Maksim Micheliov | AI-generated summary
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