Based on such recognition, overseas economies are likely to remain in a deceleration phase for the time being, but will gradually emerge from that phase and turn toward a moderate recovery thereafter. Factors behind this scenario include an improving trend in U.S. housing investment, reflecting the bottoming-out of house prices, and monetary easing effects underpinning momentum for recovery.
Interest rates in the major economies are expected to remain low for several years, and this will affect Israel’s monetary policy. The slowdown has a direct impact on the demand for Israel’s exports. The situation in Europe is likely to have a negative effect on financial stability there, and hence on global financial stability too.