July 10 (Reuters) - The Bank of Israel left short-term borrowing rates unchanged on Monday for the first time in more than a year amid signs that persistent inflation has begun to ease.

Following are the main points of the bank's post-meeting statement.

* Inflation is moderating, but is still high over a wide range of CPI components. Looking at the past 6 months, and even more so over the past 3 months, the pace of inflation is moderating in the prices of both tradable goods and nontradables.

* One-year inflation expectations and forecasts are within the target range, near the upper bound. Expectations derived from the capital market for the second year onward are within the target range.

* Economic activity in Israel remains strong, but a number of economic indicators point to some moderation in activity. The labor market remains tight, and in a full employment environment, but the downward trend in the job vacancy rate continues.

* The Research Department revised its macroeconomic forecast. In its assessment, GDP will grow by 3 percent in each of 2023 and 2024, and some of the moderating effects of monetary restraint on activity will be realized later than in the April assessment.

* The main risk to the forecast is the materialization of a scenario in which the legislative and institutional changes with regard to the judicial system are accompanied by an increase in the country’s risk premium and continued depreciation of the shekel, an adverse impact to exports, and declines in domestic investments and in demand for private consumption. The April forecast contained a quantitative assessment of this scenario.

* Globally, the pace of economic activity continues to moderate, and a number of factors continue to weigh on activity. The inflation environment is moderating in many countries, but remains above the central bank targets, while core inflation is sticky. With that, monetary tightening around the world continues.

* Economic activity in Israel is at a high level, and is accompanied by a tight labor market, although there is some moderation in a number of indicators. Inflation is broad and remains high. With that, in recent months inflation appears to be slowing.

Therefore, the Monetary Committee decided to leave the interest rate unchanged, but sees a real possibility of having to raise the interest rate in future decisions, if the inflation environment does not continue to moderate as expected. The interest rate path will be determined in accordance with activity data and the development of inflation, in order to continue supporting the attainment of the policy goals.

For the full statement, click: https://www.boi.org.il/en/communication-and-publications/press-releases/the-monetary-committee-decides-on-july-10-2023-to-leave-the-interest-rate-unchanged-at-475-percent/

(Compiled by Toby Chopra)