The Central Bureau of Statistics today published the Consumer Price Index (CPI) for March, showing a 0.3% increase. The CPI has fallen 1% over the past 12 months, and 1.3% since the beginning of the year.
Excluding housing, the CPI has fallen 2% over the past 12 months. Prominent decreases in March include fresh vegetables (4.2%) and laundry, cleaning, and insecticide materials (3.7%). The most prominent rises were in fuel and car oil (6.2%) and fresh fruit (1.7%).
The market expected a 0.4% rise in the CPI, with 0.25% attributable to a NIS 0.38 increase in the per-liter price of fuel. The increases in government linked bond prices in recent days reflected expectations that the CPI would rise even more than the forecast.
The CPI tumbled 0.9% in January and 0.7% in February. These falls were attributed to 10% cuts in water and electricity rates, not to slower demand in the economy or a slide into recession, or so Bank of Israel economists asserted.
Most economists, including Governor of the Bank of Israel Karnit Flug, believe that inflation will revert to the target range of 1-3% within a year, to which the Bank of Israel is committed by law. The Bank of Israel therefore chose to leave the interest rate unchanged in April, after cutting it to a historic low of 0.1% on February 23.
Published by Globes [online], Israel business news - www.globes-online.com - on April 15, 2015
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