Deflation is escalating as the Consumer Price Index (CPI) fell 0.7% in February, the Central Bureau of Statistics reported this evening. Analysts had expected the CPI to fall by no more than 0.6%. In the past 12 months, the CPI has fallen 1.5%, and is down 1.6% since the start of 2015.
Notable price falls in February were in household electrical appliances (9.9%), fuel and oil for vehicles (3.2%), Internet and telecom services (2.7%), overseas travel (1.9%), and footwear (3.1%).
There were notable price rises in rents (0.2%), and fresh fruit (4.2%).
Last month the Bank of Israel unexpectedly cut the interest rate by 15 basis points to a historic low of 0.1%. The question now arises if the Bank of Israel will follow the European Central Bank and lower the rate into negative territory.
Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2015
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