The Bank of Israel lowers interest rates to 3.5 percent and sees the economy growing at a slightly faster pace this year, citing the US deal with Iran, eased global geopolitical tensions, and a stable inflation environment.
The central bank reduces borrowing costs from 3.75% to 3.5%, marking the third rate cut this year, after trimming borrowing costs in May and January.
“The memorandum of understanding signed between the United States and Iran led to a decline in energy prices and a moderation of the global geopolitical tension, but the level of uncertainty remains high,” the central bank says. “Economic activity continues to recover moderately.”
The central bank says it expects the economy to grow by 4% in 2026, up from its previous March forecast of 3.8%. In 2027, the pace of growth is expected to pick up to 5.5%, similar to the March forecast. Israel’s economy grew 2.9% in 2025, which was overshadowed by the war with the Hamas terror group in Gaza for most of the year and fighting with Iran-backed proxies on multiple fronts.
Help us report truthfully on social media
As a multimedia journalist, my job is to take the quality, fact-based journalism produced by The Times of Israel newsroom and make it accessible across every platform — from Instagram posts to podcasts to short-form videos.
This is how many, especially young people, consume news these days. But misinformation is rampant on social media. Our team at ToI produces accurate, responsible short-form reporting on Israel and the Jewish world.
If you believe in the importance of factual social media journalism, please consider joining our reader support group, The Times of Israel Community. Your financial support is essential to sustain responsible multimedia reporting.
— Gabriella Jacobs, multimedia journalist
Support our work
Support our work
Already a member? Sign in to stop seeing this
You're a dedicated reader
We’re really pleased that you’ve read X Times of Israel articles in the past month.
That’s why we started the Times of Israel - to provide discerning readers like you with must-read coverage of Israel and the Jewish world.
So now we have a request. Unlike other news outlets, we haven’t put up a paywall. But as the journalism we do is costly, we invite readers for whom The Times of Israel has become important to help support our work by joining The Times of Israel Community.
For as little as $6 a month you can help support our quality journalism while enjoying The Times of Israel AD-FREE, as well as accessing exclusive content available only to Times of Israel Community members.
Thank you,
David Horovitz, Founding Editor of The Times of Israel
Join Our Community
Join Our Community
Already a member? Sign in to stop seeing this
From the Liveblog of
Monday, July 6, 2026
Add ToI as a Preferred Source on Google
