According to the forecast, Israel's GDP is expected to grow by 1.5 percent in 2024 and by 4.2 percent in 2025, lower than the April projections of 2 percent and 5 percent, respectively.
Inflation for 2024 is anticipated to be 3 percent, up from 2.7 percent in the previous forecast, while 2025 is forecasted at 2.8 percent compared to 2.3 percent previously in April.
The base interest rate for the second quarter of 2025 is expected to be 4.25 percent, slightly lower than the current rate of 4.5 percent, which the bank opted to maintain unchanged on Monday for the fourth consecutive time.
This assumption reflects a more prolonged and intense conflict compared to its April forecast, which anticipated the fighting to diminish by the end of 2024, the bank added.
"The forecast features a high level of uncertainty, particularly the greater probability of more serious security scenarios than those included in the forecast such as a further extension of the war's duration and its increased intensity on various fronts," it noted.
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