The Bank of Israel on Tuesday forecast the 2008 economic growth at 3.2 percent, compared to 5.3 percent in 2007, but officials said they did not see Israel entering a recession. Presenting the Bank of Israel's 2007 report 2007 report, Bank of Israel Governor Stanley Fischer told reporters that the fall was due to the general sluggishness of world economies, particularly that of the United States. "The Israeli economy is dealing in the current period with a very complex situation," Fischer said. "There is no doubt that the Israeli market will be affected by the slowdown in world growth." An extract of the report published by the bank said a budget deficit of 1.5 percent of gross domestic product was foreseen for 2008, compared to the balanced budget of 2007. "We shall manage to grow, albeit at a slower pace, and after the crisis we shall enjoy an even stronger economy," Fischer said. Last month Fischer, a former Wall Street banker, cut the Bank of Israel's benchmark interest rate by half a percentage point to 3.25 percent and ordered a large-scale purchase of dollars. Both moves were aimed at braking the sharp slide in the value of the US dollar against the shekel. In response to the report, Prime Minister Olmert hailed the unprecedented achievements for Israeli society, including a growth rate higher than in Western Europe or North America, for the fourth year; an apparent decline in poverty, for the first time in 25 years; the lowest unemployment data in years and increased exports. "It is no coincidence that international companies have raised Israel's credit ratings and that investors continue to be confident," said Olmert, adding that the government's policy, led by Finance Minister Ronnie Bar-On, had proven itself and that the government would not deviate from the budgetary discipline it had set for itself. "We will continue to maintain the three goals that we have set for ourselves: Reaching a diplomatic settlement, taking care of security and championing socio-economic issues, while maintaining budgetary balance. I can say that we are optimistic regarding the coming year. We expect growth to continue, even if at a slower pace than in previous years," said Olmert.