Bank of Israel sounds alarm on economic effect of growing isolation
9/29/2025 8:39:53 PM
The Bank of Israel has kept short-term interest rates unchanged, citing Israel’s push deeper into Gaza along with persistent inflation, while warning of the effect of the country’s growing global isolation.
In a news conference after the decision, Bank of Israel Governor Amir Yaron cautioned that Israel’s deteriorating reputation over Gaza could damage trade, foreign investment and the economy as a whole.
“Israel depends to a considerable extent on its participation in the global economy,” Yaron said. “Therefore, Israel must do all that it can to strengthen its international standing, and thus ensure that the economy is open.”
Yaron warned that the continuation of the conflict would lead to further supply constraints and weigh on recovery.
“As a direct result, growth would be lower, the budget deficit would expand, and the paths of inflation and the interest rate would be higher,” he said.
In a news conference after the decision, Bank of Israel Governor Amir Yaron cautioned that Israel’s deteriorating reputation over Gaza could damage trade, foreign investment and the economy as a whole.
“Israel depends to a considerable extent on its participation in the global economy,” Yaron said. “Therefore, Israel must do all that it can to strengthen its international standing, and thus ensure that the economy is open.”
Yaron warned that the continuation of the conflict would lead to further supply constraints and weigh on recovery.
“As a direct result, growth would be lower, the budget deficit would expand, and the paths of inflation and the interest rate would be higher,” he said.