The Consumer Price Index (CPI) fell by 0.2% in February, the Central Bureau of Statistics announced today. Analysts had expected a fall of 0.2-0.3%.
The annual rate of inflation is running at just 0.6%. Inflation over the twelve months to February was 1.2%, and in the first two months of 2014, the CPI fell 0.8%. In other words, there is no inflation in Israel, reflecting low demand in the economy.
The clothing item in the CPI fell 5.5% in February; fresh vegetables fell 8.5%; telephone and Internet fell 2.6%; fuel fell 1.2%; meat fell 2.7%; milk fell 1%; and footwear fell 2.5%.
On the other hand, the housing item rose 0.3%; overseas travel rose 0.5%; personal services and cosmetics rose 1.2%; fish prices shot up 12%; and fresh fruit rose 4%.
In January, the CPI surprised with a fall of 0.6%, which compared with estimates of a 0.3% fall.
The Bank of Israel cut its interest rate for March by 0.25% to 0.75%. Among the reasons cited for the cut were the January CPI reading, the generally low inflation environment, and the appreciation of the shekel. The bank said it wanted to consolidate the rate of inflation within the price stability target of 1-3% over the next twelve months.
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2014
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