Bank of Israel forecasts slower economic growth in 2008

Bank of Israel forecasts slower economic growth in 2008

Israel's central bank issued last week a forecast of the country's 2008 economic growth reducing the forecast to 3.2%, compared to 5.3% growth in 2007
07.04.08 / 00:00
Bank of Israel forecasts slower economic growth in 2008
07.04.08
Bank of Israel forecasts slower economic growth in 2008

Israel's central bank issued last week a forecast of the country's 2008 economic growth reducing the forecast to 3.2%, compared to 5.3% growth in 2007
 
Bank of Israel governor, Stanley Fischer, presenting the Bank of Israel's 2007 report, noted that the slow growth was mainly due to the general sluggishness of world economies, particularly that of the United States.
 
''The Israeli economy is dealing in the current period with a very complex situation,'' Fischer said. ''There is no doubt that the Israeli market will be affected by the slowdown in world growth.'' 
 
Dr. Karnit Flug, manager of the central bank's research department, added that the forecast made two months ago of 4.4% had been based on an optimistic scenario, while 3.6% had been based on the pessimistic one, assuming that the American economic woes would spread around the world and that Israel's security situation would deteriorate.

Last month Fischer cut the Bank of Israel's benchmark interest rate by half a percentage point to 3.25% and ordered a large-scale purchase of dollars.
 
Both moves were aimed at braking the sharp slide in the value of the American dollar against the Israeli shekel.

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