Israel - Selected Issues (Electronic book text)

1. In the face of global crisis, Israeli output growth was amongst the last to fall below trend, among the mildest hit, and one of the earliest to stage a recovery. Output is projected to have been no worse than flat overall in 2009, and was up in both Q2 and Q3 2009. Though bonds and equities fell sharply in late 2008, there was no melt down in local markets, even without the full swathe of emergency financial stabilization measures typical elsewhere. Indeed, since early 2008 Israel appeared to acquire safe haven status, experiencing sharp increases in net capital inflows and real exchange rate appreciation, despite sustained foreign reserve accumulation. And in September 2009, the Bank of Israel (BoI) was the first central bank globally to raise policy rates for over a year, one of several steps it took to begin the exit from the monetary measures that had been adopted in response to the global crisis.