| Israel imf debt { April 11 2003 } Original Source Link: (May no longer be active) http://www.haaretzdaily.com/hasen/pages/ShArt.jhtml?itemNo=282905&contrassID=2&subContrassID=2&sbSubContrassID=0&listSrc=Yhttp://www.haaretzdaily.com/hasen/pages/ShArt.jhtml?itemNo=282905&contrassID=2&subContrassID=2&sbSubContrassID=0&listSrc=Y
Friday, April 11, 2003 Nisan 9, 5763 IMF: Bank of Israel could loosen monetary restraints By Amir Teig The Bank of Israel could ease monetary restraints and lower interest rates on the backdrop of the downtrend of inflation risks and the strengthening of the shekel, assess International Monetary Fund analysts in a recent report on the global economies.
The analysts also wrote that budgetary restraint was a must for Israel, considering the magnitude of the government deficit and the fears that the ratio of public debt to GDP would continue to deteriorate.
The IMF predicts economic growth of only 0.5 percent for Israel in 2003 - against the treasury's prediction of 1 percent, on which the government's budget for the year is based.
Regarding inflation, the IMF expects a rate of 2.8 percent in 2003, roughly the rate forecast by most local analysts. In 2004, they see inflation dropping to only 1 percent.
Unemployment will reach 10.7 percent this year, slightly above its current level, falling to 10.1 percent in 2004.
Looking back, in 2002, Israel's economic condition was exacerbated by a temporary loss of confidence in the economic and political leadership, the IMF says. The shaken confidence kicked up the exchange rate of the shekel, limiting the leadership's economic room to maneuver.
While Israel's GDP growth has picked up, the IMF says, domestic and external demand remain weak, and the economy is vulnerable to geopolitical risks.
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