Bank of Israel raises interest rate again, warns about judicial fallout
The OECD is predicting GDP growth rate to slow in Israel this year, while the Bank of Israel has worked out different scenarios based on fallout from the judicial reform controversy.
Israel’s central bank raised its interest rate again on Monday. The bank has been aggressively raising rates for the past year to combat inflation.
The Bank of Israel’s Monetary Committee raised the rate by 0.25% to 4.5%, citing “broad and high” inflation. The bank said that inflation is at 5.2% over the past 12 months. Annual inflation is slightly higher for nontradeable components such as housing and services. Inflation for these is 5.5%, according to a press release from the bank.
“The Monetary Committee’s assessment is that the monetary tightening processes in Israel and abroad, and the moderation of demand, are working to moderate inflation,” said the Bank of Israel.
The bank also said it developed different gross domestic product (GDP) forecasts depending on what happens with the Israeli judicial reform saga. Prime Minister Benjamin Netanyahu paused the reform legislation last week amid widespread protests and entered into talks with the opposition.
