Remarks by the Governor of the Bank of Israel at the press briefing on monetary policy held today at the Bank of Israel.
ENPNewswire-January 4, 2022--Remarks by the Governor of the Bank of Israel at the press briefing on monetary policy held today at the Bank of Israel
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Release date- 03012022 - Good afternoon.
Yesterday and today, the Monetary Committee held discussions at the Bank of Israel in order to decide on monetary policy.
The end of the year, and the beginning of a new one, is a good point in time to stop and look back-and to look forward as well. Living with the cyclical nature of the spread of the coronavirus is our reality currently, and will apparently continue to be so for the foreseeable future as well. When I look at my remarks from recent press briefings, I see how in July we spoke about exiting the third wave, and in October we referred to a fourth wave. Now, as we end 2021, and head into 2022, we are dealing with a fifth wave. We are constantly aware of this reality, of the cyclicality, and of the persistent risks, and they are taken into account when analyzing the economic situation and in reaching monetary policy decisions.
We cannot know with certainty how the fifth wave-'the Omicron wave'- will turn out, in terms of health and the economy. It appears that it will be different in its scope of infection and in the extent of its impact on the rate of severe illness. These also impact on the methods that the government chooses to adopt to deal with new wave. However, it can be said that the Israeli economy has learned to function alongside the virus, to adjust to it, and to successfully conduct economic activity even when facing the threat of infection and the risks. Therefore, we have to do the best we can to enable the economy to continue to work and prosper while protecting health and maintaining control of the scope of morbidity.
Let me turn now to an overview of the main economic developments. Our assessment is that in 2021, GDP grew by 6.5 percent. This is according to the Research Department's staff forecast published today. This is impressive growth that indicates the strength of the recovery, and shows that the level of GDP is approaching the trend that would have been expected if not for the pandemic. When looking at activity itself, we see that the aggregate balance of the Business Tendency Survey conducted by the Central Bureau of Statistics already returned in the beginning of 2021 to expansion, and has remained in that area since then. Credit card purchases, which were used as...
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