JERUSALEM, Jan 1 (Reuters) - Bezalel Smotrich took over as Israel's finance minister on Sunday, pledging fiscal responsibility and a boost to competition while working to tackle high living costs at a time of elevated inflation and slowing global economic growth.

A host of ministries held changing of the guard ceremonies on Sunday after a new government of right wing and religious parties was sworn in last Thursday.

"Israel will be an island of stability and responsibility," the 42-year old Smotrich, head of the far-right pro-settler Religious Zionism party, told Reuters after the ceremony at the finance ministry.

He added that Israel would take all necessary steps to support economic stability and be the "safest place" to invest.

Smotrich's comments continued to allay fears he would be guided by Jewish biblical principles after he said last month that economic strategy will be infused with religious beliefs laid out in the Torah, predicting that this would help the country prosper.

He declined to give specifics of his planned fiscal policy, though acknowledged the country was entering a "challenging period" and repeated his belief in free markets driven by the business sector.

Smotrich said he feared inflation would become "sticky", leading to more interest rate rises that would slow growth, which is already forecast to drop this year to half of 2022's 6%.

Inflation is currently at a 14-year high of 5.3% while the benchmark interest rate has soared to 3.25% from 0.1% in April, with a likelihood of another hike to 3.75% on Monday.

Incoming economy minister Nir Barkat said he intends to ease the "unbearable load" on businesses in Israel, declaring a "war on regulation", which he called "a cancer on the economy".

Meanwhile, Israel's new police minister Itamar Ben-Gvir, who was convicted in 2007 of incitement against Arabs and support for a Jewish militant group, repeated a line he used on the campaign trail saying, "every police officer should know that if a terrorist comes to hurt you his blood is forfeit".

His predecessor Omer Bar Lev bristled at having been assigned body guards due to what he described as threats by far-right Jews angered at his comments about settler violence.

Departing defence minister Benny Gantz advised his successor Yoav Galant to erect what he called a "protective wall" between the military and politics while Galant stressed his belief that Iran poses a serious threat to Israel and the region.

New tourism minister Haim Katz promised to promote tourism in the occupied West Bank. (Reporting by Steven Scheer Additional reporting by Ari Rabinovitch and Dan Williams, Emily Rose; Editing by Kirsten Donovan)