The Israeli economy grew at its fastest pace in over two years in the second quarter boosted by an increase in consumer spending and exports, surpassing earlier forecasts.
Domestic demand in Israel leaped 8.7 percent in the quarter. Exports, which make up 40-45 percent of economic activity, rose 15.8 percent as sales continued to rebound from the global financial crisis.
Annual inflation fell to a rate of 1.8 percent in July, staying within the official 1 to 3 percent inflation target. The Bank of Israel raised its benchmark lending rate for the fifth time this year to 1.75 percent, in an attempt to combat rising inflationary pressures stemming from surging housing prices.