Revised Growth Data Shows Smaller Contraction, but War’s Economic Cost Remains Clear

The author says the weaker growth data, combined with May inflation figures, could help the Monetary Committee decide to cut interest rates at its next meeting. But inflation remains mixed: tradable goods are in a deflationary environment, with tradables down 1.1% in May and up only 0.4% over 12 months, while non-tradables rose at a slower pace but still stand at 2.9%. The strong shekel is presented as the main force holding down prices, especially imports, and as the key factor that may keep supporting lower inflation even if the currency weakens somewhat.