Bank of  Israel - Tomer Appelbaum - 07.07.2011
The Bank of Israel building in Jerusalem. Photo by Tomer Appelbaum
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The Bank of Israel lowered its forecast of the country's economic growth this year to 4.7% and, significantly, next year's expected growth to 3.2%. The central bank had previously estimated growth for 2011 at 5.2%, and for 2012 at 4.2%.

The central bank's research department released its quarterly forecasts yesterday, and predicted the rate of inflation over the next four quarters will be 2.3%, slightly above the middle of its target range.

"Uncertainty over the continuation of global economic recovery increased significantly since the previous forecast was prepared, at the end of July," wrote the research department. "Investment banks and international entities are revising their forecasts downward, under the assessment of an increased probability of a global recession, even if one not as strong as in 2008-09."

The Bank of Israel also estimated that interest rates will be 3% one year from now.

Imports are expected to grow 3% in 2012, significantly below the pace of the past two years, wrote the central bank.

The International Monetary Fund's forecasts predict 4.8% economic growth this year, and 3.6% in 2012.