Abstract
This document presents the forecast of macroeconomic developments compiled by the Bank of Israel Research Department in September 2012. According to the staff forecast, the inflation rate over the next four quarters (ending in the third quarter of 2013) will be 2.6 percent. The Bank of Israel interest rate is expected to be remain at its current level of 2.25%. Gross domestic product (GDP) is expected to grow by 3.3 percent in 2012 and by 3.0 percent in 2013.