Bank of Israel Governor warns: Inflation in the economy is expected to rise
The Governor of the Bank of Israel recently published new assessments regarding the economic situation in Israel. According to the data, there is real concern regarding rising inflation, which could affect the cost of living for every citizen in the country in the near future.
Alongside the macroeconomic data, voices are being heard from various sectors of the economy regarding the labor force situation. In the construction industry, for example, it is reported that the current situation is different from what it was before the outbreak of the war. Despite the security challenges, a significant increase in worker productivity on the ground has been recorded.
According to rough estimates by industry sources, productivity has increased by about 30% compared to the period before the war. However, the improvement in productivity comes alongside an increase in wages, which creates additional pressure on business owners and on final consumer prices.
The combination of rising wages and inflationary pressures poses a complex challenge for economic policymakers. The Bank of Israel continues to monitor the data closely to decide on the next steps, with the aim of maintaining the stability of the Israeli economy during this challenging period.