The Bank of Israel’s Monetary Committee decided to increase the interest rate from 0.25 percent to 0.35 on Monday.

It said “the Israeli economy is recording strong growth, accompanied by a tight labor market and an increase in the inflation environment. The committee has therefore decided that conditions allow for the start of a gradual process of increasing the interest rate.”

The bank sees the economy as strong and has returned to levels similar to before the coronavirus pandemic hit in the first quarter of 2020.

It also noted that housing prices have continued to rise at a rate of 13 percent over the past year.

Its research department further assessed that the GDP will grow by 5.5 percent in 2022 and 4 percent in 2023.

Meanwhile, the global rating agency Moody’s upgraded Israel’s outlook on April 8 to “positive” from “stable.”

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