Economy

Bank of Israel Predicts Early 2025 CPI Surge Amid Economic Challenges

Bank of Israel Governor Discusses Inflation Challenges

At the World Economic Forum in Davos, Bank of Israel Governor Amir Yaron addressed the inflationary pressures facing the Israeli economy. With inflation currently at 3.2%, surpassing the central bank's target range of 1-3%, Yaron anticipates a rise in early 2025 due to increased demand and tax changes. He remains optimistic about potential interest rate cuts in the latter half of the year.

Economic Growth Projections

Yaron highlighted the economy's resilience, rooted in strong pre-October 7 foundations and a history of recovery from military conflicts. The economy is expected to grow by 0.6% in 2024, with a significant rebound to 4% in 2025, provided further escalations are avoided.