For the eighth consecutive time, the Bank of Israel left its benchmark interest rate unchanged at 4.5%, equivalent to a 6% prime rate. The central bank also released an updated economic forecast on Monday, showing improved projections compared to previous estimates.
According to the new forecast, Israel’s GDP is expected to grow by 4% in 2025, up from the previous prediction of 3.8%. Private consumption is projected to rise by 7.5%, compared to the earlier estimate of 7%. The fiscal deficit is expected to narrow slightly to 4.7% from 4.9%.
Inflation for 2024 is forecasted to reach 3.4%, down from 3.8% in the previous outlook. By 2025, inflation is expected to further decline to 2.6%, compared to the earlier projection of 2.8%.