A "Bloomberg" poll of 21 analysts is unanimous: The Bank of Israel will keep the interest rate for February at 1.75%. The Bank of Israel will announce the interest rate after the markets close tomorrow.
The February interest rate decision comes after last Tuesday's Knesset elections, and the announcement that the 2012 budget deficit was NIS 39 billion, or 4.2% of GDP, more than double the government's target. In addition, because the government failed to pass a budget, until the new government is formed and passes a budget for 2013, the actual budget is temporarily monthly budgets of 1/12 of the 2012 budget.
In addition, the Central Bureau of Statistics reported that the Consumer Price Index (CPI) rose by 0.2% in December 2012 and by 1.6% in the year as a whole, below the midpoint of the government's 1-3% inflation target, an indication of the economic slowdown and drop in consumer demand. Furthermore, according to analysts, the rise in the unemployment rate 2012 will continue into 2013, and together with the stability in prices, could cause the Bank of Israel to make another 25-basis point cut in the interest rate later this year.
Published by Globes [online], Israel business news - www.globes-online.com - on January 27, 2013
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