Bank of Israel Governor Prof. Amir Yaron gave a press conference following his announcement that the BoI was keeping interest rates at 4.5%, and expressed confidence in the Israeli’s economy ability to rebound despite headwinds.
Although the BoI had hiked rates several times before the war to combat inflation, Yaron said “geopolitical uncertainty” has increased economic risk, and therefore, the interest rate would remain unchanged.
However, despite the geopoliltical uncertainty, Yaron emphasized that, looking at the macro picture, Israel’s economy seemed poised to rebound despite challenges.
Although the war has created obstacles to economic activity and growth, most evident in the lull in construction, there is some encouraging news in the startup sector, which has seen impressive fundraising.
Yaron said, “We see encouraging improvement in the amount of capital raised by startup companies in the second quarter, which serves as a significant indicator in view of the high tech industry’s importance to the Israeli economy.”
