Daily Israel Report

Price Index Up by 0.02%

Consumer Price Index defies expectations, rises by 0.02% in January after 0.04% December increase.
By Maayana Miskin
First Publish: 2/15/2011, 8:53 PM / Last Update: 2/15/2011, 9:05 PM

S. Cohen, Arutz Sheva

The Consumer Price Index rose by 0.02% in January, the Central Bureau of Statistics revealed Tuesday. Many analysts had predicted that the index would remain stable, after rising by 0.04% in December.

The increase was spurred by a rise of 4.3% in the price of fresh fruit and a 2.1% increase in the cost of transportation. Housing rentals were up by 0.4%.

The cost of housing was given more weight in the calculation of January's index than in the past. While housing (rent) previously made up 21% of the index, it now makes up 24.3%.

Other items decreased in cost in January. Fresh vegetables were 5.2% cheaper than in December, and clothing and shoes were 4% less expensive.

Over the past 12 months, inflation has stood at 3.6%, above the government goal of 1%-3% per year. If housing, fruits and vegetables were to be removed from the index, the increase for the past year would stand at 6.1%.

Last week, Prime Minister Binyamin Netanyahu unveiled a major economic package designed to ease public upset over rising costs. The plan includes a hike in the minimum wage, and a decrease in the costs of water, public transportation, and fuel.

In its Inflation Report for the months of October-December 2010, the Bank of Israel noted that the increase in housing costs had moderated, but that food and energy costs continued to rise, dragging the index up. Bank experts predicted inflation of 2.6% in 2011.