Bank of Israel cuts 2020 growth forecast

Growth Photo: Shutterstock

The Research Department has cut the growth forecast for 2020 from 3.5% to 3% due to the effects of the global economic slowdown.

The Bank of Israel Research Department today presented its updated macroeconomic forecast to the Monetary Committee and published it for the public. The Research Department projects that in 2019, GDP will grow by 3.1%, similar to the previous forecast, while the growth forecast for 2020 was reduced to 3%, compared with 3.5% in the previous forecast, due to the global economic slowdown’s expected effect on exports, and the assumption that the government will take steps to reduce the deficit.

The Bank of Israel Research Department expects the inflation rate to rise gradually, reaching 1.2% in 2020. In view of the developments in inflation, the exchange rate, and the global economy, the Research Department assesses that the interest rate will remain unchanged or will be reduced during 2020.

However, in today's interest rate decision Bank of Israel Governor Prof. Amir Yaron observed that the Monetary Committee was not unanimous in keeping the rate unchanged and there were good reasons for cutting the rate below 0.25% already.

Published by Globes, Israel business news - en.globes.co.il - on October 7, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Growth Photo: Shutterstock
Growth Photo: Shutterstock
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