The Bank of Israel Monetary Committee has increased the country’s interest rate to 3.75%—representing a 0.5% rise, the central bank’s largest since 2008.

“Inflation in Israel is 5.3% over the past 12 months,” the Bank of Israel stated, reported Globes. “Economic activity in Israel remains strong, but the growth rate appears to have slowed relative to the first half of 2022.”

Since the Bank of Israel increased the rate from its all-time low of 0.1% to 0.35% in April 2022, it has subsequently increased rates seven times.

The Bank of Israel expects inflation to reach 3% in 2023, up from 2.5% in its most recent prediction in October 2022. The Bank of Israel anticipates an interest rate of 4% by the end of 2023.

Israel’s GDP is predicted to expand by 2.8% in 2023 (down from 3% in a prediction in October) and 3.5% in 2024.

Meanwhile, the shekel continues to weaken against the dollar, ending the year at around 3.5 NIS to $1 compared to 3.11 at the beginning of 2022.

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