As widely predicted, the Bank of Israel will leave the interest rate unchanged at 0.1% for the 26th consecutive month. The economic newspaper Globes announces it. The Monetary Committee of the Central Bank links the decision to the expectations of an increase of the annual inflation rate, albeit always below the planned inflation rate between 1 and 3%.

These are linked, on the one hand, to a nominal increase in wages and robust economic activity, on the other hand to the appreciation of the shekel, to the acceleration of economic competition and to the measures taken by the government in fiscal policy.

In spite of the fact that the result of the first quarter growth has halved to 1.4%, export and investment indicators are positive. Only private consumption slows down and the labor market continues to be close to full employment.

As far as the world economy is concerned, the Bank underlines a steady trend of growth with a tendency to improvement also due to a decreasing political risk in Europe.

From the point of view of monetary policy, the US interest rate may rise in June, while Europe and Japan will continue to resort to soft policies.


Source: medNews