Tuesday, 23 May 2023 | The Bank of Israel on Monday raised its benchmark interest rate for the 10th consecutive meeting amid rising inflation and low unemployment.
The central bank’s Governor Amir Yaron announced the benchmark rate increase of 25 basis points (0.25 percentage points) to 4.75%, its highest level since late 2006.
“Economic activity in Israel is at a high level, and is accompanied by a tight labor market, although there is some moderation in a number of indicators. Inflation is broad and remains high,” the bank said in a statement.
“The tighter monetary policy and moderation of activity abroad are expected to lead to a slowing in the pace of inflation alongside some slowdown of economic activity in Israel,” the statement continued.
Israel’s annual inflation rate stood at 5% in April, a slight decrease from the 14-year high of 5.4% seen in January but above the market forecast of 4.7%. The government’s annual target range is 1–3%. The bank expects inflation of 3.9% this year and 2.3% next year.
The Jewish state’s economy grew faster than expected at a 2.5% annualized rate in the first quarter compared to the previous three months, which is also reflected in the tight labor market.
The unemployment rate in Israel continued to slide in April to 3.1%, compared to 3.3% in March (a seasonally adjusted drop from 3.8% in March to 3.6% in April), according to data last week from the Central Bureau of Statistics [CBS].
CBS labor data published on Monday showed that high-tech sector employment increased in April compared to the previous month (from 453,000 to 454,000).
Editor’s Note: As interest rates rise yet again, the ripple effect is felt across Israeli society. For some, this means tightening their belts and going without certain things. For others, it is catastrophic. As more and more Israelis struggle to make ends meet and feed their families, they are turning to Bridges for Peace, a trusted Christian partner that has for more than 50 years come alongside the people of Israel in their time of need. We want to answer every cry for help, but the increasing need and rising prices present a challenge. We are asking for the support of Christians from around the world who love God and love Israel so that we can show Christian love in a practical way. Your donation to our Food Project will enable us to say “yes” to more hungry Israelis.
Posted on May 23, 2023
Source: (This article was originally published by the Jewish News Syndicate on May 23, 2023. Time-related language has been modified to reflect our republication today. See original article at this link.)
Photo Credit: Bank of Israel spokesperson/jns.org
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