The Bank of Israel is expected to keep short-term interest rates unchanged at a policy meeting next week due to the resumption of strikes in Gaza and Lebanon. Inflation is expected to ease in the second half of the year, and the central bank hopes to lower rates once or twice in 2025. Israel's economy grew 0.9% in 2024 and is projected to grow 3.4% this year. The government blames war-related supply issues for sticky inflation. Israel's high risk premium has risen again as ceasefire deals with Hamas and Hezbollah could be in jeopardy.