The Bank of Israel announced today (Monday) that it will leave the interest rate in the economy unchanged - 4%.
The bank's monetary committee decided not to lower the interest rate despite the fact that inflation is within the target range set by the bank - 2%, due to the uncertainty following the fighting in Iran and Lebanon and the fear that inflation will climb, among other things, due to the increase in fuel prices.
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Yesterday, the Chief Economist at the Ministry of Finance, Dr. Shmuel Abramson, published data indicating that, as a result of the prolonged fighting, the growth forecast for the Israeli economy is being sharply cut.
According to the forecast, in a scenario in which the fighting in Iran continues until mid-April and the fighting in Lebanon until the end of April - the Ministry of Finance estimates that the economy will grow by 3.81% less than the previous forecast, which was also revised downwards due to the fighting in Iran.
The Treasury also presented a scenario in which the fighting in Iran continues until the end of April and in Lebanon until the end of the second quarter of the year. At that time, it is estimated that growth will be cut to only 3.31% of GDP.
However, according to the updated forecast, the more significant the damage to growth this year, the more the economy will grow next year.
