The Bank of Israel Monetary Committee raised the interest rate for the nation by 0.5% to 3.75%, the most significant increase since 2008.
According to the Bank of Israel, Israel’s inflation rate for the past year was 5.3%, according to Globes.
Although Israel’s economy is still doing well, the growth pace seems to have decreased compared to the first half of 2022.
The rate has since been raised seven times by the Bank of Israel, from an all-time low of 0.1% to 0.35% in April 2022.
The Bank of Israel forecasts that inflation will increase to 3% in 2023 from its most recent estimate of 2.5% in October 2022.
By the end of 2023, the Bank of Israel projects that interest rates will be 4%.
According to forecasts, Israel’s GDP would increase by 2.8% in 2023 (down from 3% in an October prediction) and 3.5% in 2024.
In the meantime, the shekel’s value relative to the dollar keeps declining; towards the end of the year, it was around 3.5 NIS to $1 as opposed to 3.11 at the start of 2022.