Bank of Israel (Central Bank) data showed on Tuesday that the economy slowed last April after growth in the first quarter following a violent shock in late 2023 as a result of the war on the Gaza Strip.
A Bank of Israel statement showed that the composite economic condition index declined by about 0.15% last month, reflecting “some slowdown in economic activity.”
Following the outbreak of war in Gaza on October 7, the Israeli economy contracted by 21.7% on an annual basis in the last quarter of last year, before growing by 14.1% in the first quarter of this year.
Benefit
Last Monday, the bank’s Monetary Policy Committee kept the interest rate at 4.5% for the third meeting in a row after reducing it by 25 basis points last January, attributing this to the high pace of inflation and “the continued gradual improvement in economic activity and the labor market.”
Bank of Israel Governor Amir Yaron later said that further rate cuts were not on the table at the moment.
The Central Bank statement stated that the index was affected last April by increases in items including exports of goods, the job vacancy rate, and credit card purchases, which were offset by declines in industrial production, imports of consumer goods, and production inputs excluding fuel.
The bank revised data for last March to an increase of about 0.18% from a decrease of about 0.05%.
