Bank of Israel maintains rate at 4.5%

Bank of Israel decided on Monday to maintain the interest rate at 4.5 per cent. Economic activity is recovering at a moderate pace, although supply constraints in certain sectors are delaying GDP growth, the central bank stated.

Inflation remains stable at 3.4 per cent but is expected to rise in the first half of 2025 due to tax changes and supply issues, before moderating in the latter half of the year.

Moreover, the Research Department forecasts GDP growth of 0.6 per cent for 2024 and 4.0 per cent for 2025, with inflation anticipated to decrease to 2.6 per cent in 2025.

The labour market remains tight, with slight improvements in employment rates. Meanwhile, housing prices have risen by 6.7 per cent annually.

The shekel has appreciated by 0.5 per cent against the US dollar and 2.4 per cent against the euro.

The government budget deficit is expected to reach 7 per cent of GDP in 2024, with public debt rising to 67 per cent of GDP.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser