A new report from Israel’s Central Bureau of Statistics revealed the country’s inflation rate as 5.3% in 2022, citing increases in housing, food, transportation and telecommunications prices.

The annual rate in December remained steady from November, remaining at its highest level since October 2008. Still, it was somewhat lower than the 5.4% rate predicted in a Reuters poll of analysts and significantly below Western levels.

The Bank of Israel has drastically increased its benchmark interest rate from 0.1% in April to 3.75% in an effort to drive inflation back to the 1-3% target range. The central bank 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.

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