THE Bank of Israel will probably leave its benchmark lending rate unchanged this week, ending a string of four increases, on concern that the global credit crisis will slow economic growth.

The bank will hold the rate at 4.25 percent, according to 15 of 17 economists surveyed by Bloomberg News, with the rest predicting a quarter point increase. The Jerusalem-based bank will announce its decision today.

"We don't expect the bank to raise rates - not because of inflation, which was actually high in August, but because of the situation in the world," said Yaniv Hevron, an economist at Psagot Investment House Ltd in Tel Aviv. The global turmoil "will come to Israel eventually."

Gross domestic product will probably expand 4.4 percent this year, the slowest since 2003, and growth may slow in 2009 to 2.9 percent, Merrill Lynch & Co said in a September 12 report before the collapse of Lehman Brothers Holdings Inc set off a new round of turmoil in world financial markets.

The Central Bureau of Statistics will provide its preliminary estimate for 2008 GDP growth on Wednesday.

While annual inflation has been above the government's target of between 1 percent and 3 percent since November, reaching 5 percent in August, the pace will probably slow, Migdal Capital Markets Ltd said in a report last Thursday, citing commodities prices.

Preventing a further deterioration in economic growth is more important than grappling with inflation, Migdal said, and the bank may lower the rate in the first quarter.