Speaking at the Globes Phoenix Investment Conference today, Dr. Golan Benita, Head of Markets at the Bank of Israel, explained how the bank views the global and local macroeconomic environment.
“Between the end of 2022 and the beginning of 2023, there was broad consensus among investment houses and international bodies that the United States and Europe would face a major recession in 2023. Thus, the assessment in financial markets was that inflation would recede quickly. Since then, several developments have taken place.” .
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“The most important things we can list all of are the opening up of the Chinese economy, the removal of Covid restrictions, a warmer than expected winter in Europe and the very good preparations that Europeans have taken to avoid an energy crisis that could have hit their economies hard. Above all, with the passage of time, The data indicated resilient labor markets and private consumption in most developed countries.
Bennetta spoke of pessimistic predictions that were proven wrong. “If you look at the growth projections for 2023 by investment firms at the beginning of the year and today, you can see a significant upward revision, in the US, Europe and China as well.” Regarding the policy adopted by the Bank of Israel, Benita said that, compared to other countries, it responded very quickly to rising inflation. “Within nine months of inflation rising to its head and exceeding the target range, the Bank of Israel reached a positive real interest rate.”
Benita said that growth in Israel is strong, employment is at its peak, and the unemployment rate is low, but nevertheless it was possible to identify several indicators of moderate activity. Among other things, Bennetta mentioned the number of job vacancies, which he said are declining and approaching pre-Covid levels. Regarding inflation, he said: “When we look at the quarterly rate, the semi-annual rate, and the seasonally adjusted rate, we see that the quarterly rate is less than the annual rate, and thus we conclude that there is a degree of moderation in the rate of inflation.”
The investment conference is being held in association with The Phoenix Holdings and sponsored by Strauss Group.
Published by Globes, Israel business news – en.globes.co.il – on June 14, 2023.
© Copyright Globes Publisher Itonut (1983) Ltd., 2023.
