The Consumer Price Index (CPI) rose 0.1% in June, the Central Bureau of Statistics reported this evening. This was in line with expectations and the consensus of a panel of 10 analysts polled by "Bloomberg." Trend figures indicate a current annual rate of inflation of just 0.9%, below the the government target range of 1-3%.
Significant price rises in July included 1.1% in housing services, 0.4% in rents, 4.6% in tourism and leisure, and 3.7% in fresh vegetables.
Significant price falls included 9.4% in clothing, 4.9% in footwear, and 2.2% in fuel.
The analysts also predict that the GDP growth figure for the second quarter, which the Central Bureau of Statistics will publish tomorrow, will be an annualized 2.5%, down from the 2.7% growth rate in the first quarter. The forecast is lower than the 3.2% forecast by the Ministry of Finance and 2.9% forecast by the Bank of Israel.
The inflation and growth forecasts, if they materialize, give the Bank of Israel an opening for another interest rate hike from the current rate of 2.25% by the end of the year. However, worrying real estate figures may prevent a rate cut to avoid a real estate bubble.
Published by Globes [online], Israel business news - www.globes-online.com - on August 15, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012