BoI keeps rate unchanged, raises growth forecast

Amir Yaron / Photo: Rafi Kotz, Globes

Housing sales in Israel remain sluggish

The Bank of Israel Monetary Committee has kept the rate unchanged at its all-time low of 0.1%.

The Bank of Israel Monetary Committee, headed by Governor Prof. Amir Yaron, has decided to keep the interest rate unchanged at its all-time low of 0.1%.

At the same time the Bank of Israel has improved the 2020 growth forecast from a contraction of 6%, which it predicted in July, to a contraction of 4.5%, which was the Bank of Israel's forecast in May, before the second wave of Covid-19 struck. However, the Bank of Israel warns that if the pandemic worsens then the economy could contract by 7%. The Bank of Israel forecasts 6% GDP growth in 2021 compared with 3% if the pandemic worsens.

The Bank of Israel expects unemployment to fall to 11.5% by the end of the year or 13.6% if the pandemic worsens.