Israel: Q2 rebound doesn’t rule out further rate cuts

17th August 2026

The rapid recovery in Israel’s GDP in Q2 confirms that the start of the Iran war had only a minor and temporary effect on the economy, and GDP growth now looks on course to exceed 4% over this year as a whole. But with inflation pressures still soft, we think the Bank of Israel is still on course to deliver a couple of 25bp interest rate cuts over the next 6-9 months, to 3.00%.

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Israel: Q2 rebound doesn’t rule out further rate cuts

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