For the ninth time in a row, the Bank of Israel again raised the interest rate by 0.25%, bringing it to 4.5%. The monthly repayment of an average Israeli mortgage will increase by another 60 shekels, to a total of about 1,030 shekels since the interest rate hike began in April last year.
The Knesset was supposed to approve extending the benefit of extra credit points for parents of children aged 6 to 12 until the end of the year, but the text has not yet been voted on in the second and third readings. The Ministry of Finance clarifies that, when the extension is approved, the money goes back to the parents retroactively.
According to the president of the Union of Chambers of Commerce, Uriel Lin, “it is forbidden to continue raising the interest rate of the Bank of Israel. This is starting to be devastating for the economy and the general public. It This is a mortal wound for mortgage payers as a real solution to their problem has yet to be found Rising interest rates in themselves increase the cost of living and costs in the business sector.”
The consequences are already being felt in the housing market – the fall in demand for real estate, which results from high interest rates, is moderating price increases and has even started to drive down the prices of new apartments. Separately, the Bank of Israel warned of significant economic damage if the disputed judicial reform that was frozen until this summer by the government is maintained. Damage to exports, lower local investment and demand from private consumption are to be expected.
