Inflation in Israel slowed last month, rising only 0.1% in September. Last month’s modest rise, was preceded by a sharp 1.1% rise in July and a 0.2% rise in August.
Israel has succeeded in keeping its inflation rate relatively low, despite rising costs of fuel and transportation.
Excluding the cost of housing and fruits and vegetables, the inflation rate for September stood at 0%. Holiday shopping pushed fruits and vegetable prices up by 4.4%. The cost of purchasing a home dropped by 0.3%, but the expense of maintaining one rose by 1.2%.
The cost of fuel rose by nearly 5%, but was offset by falling prices in other sectors. The price of clothing and shoes fell by 5.2%, and entertainment and culture by 1.4%. Vacationers spent less for a hotel stay in September, with that cost dropped dramatically by 17.8% (after rising by 14% in August).
Since the start of the year the consumer price index has risen by 1.9%, and annual inflation is expected to reach 2.5% by year’s end, within the government’s target of 1-3%.
The past four months, however, had shown a trend of accelerating inflation, rising at a 4.5% annual rate. In response, the Governor of the Bank of Israel, Stanley Fischer, raised the interest rate last month to 3.75%. Prior to that, the rate had remained at 3.5%, a record low, for eight months.
If the shekel-dollar exchange rate remains stable, September’s lower inflation trend may continue. A 0.3% rise in the CPI is expected for October, to be followed by a 0.1% rise in November.
Fischer will be announcing November’s interest rate on October 24.
Israel has succeeded in keeping its inflation rate relatively low, despite rising costs of fuel and transportation.
Excluding the cost of housing and fruits and vegetables, the inflation rate for September stood at 0%. Holiday shopping pushed fruits and vegetable prices up by 4.4%. The cost of purchasing a home dropped by 0.3%, but the expense of maintaining one rose by 1.2%.
The cost of fuel rose by nearly 5%, but was offset by falling prices in other sectors. The price of clothing and shoes fell by 5.2%, and entertainment and culture by 1.4%. Vacationers spent less for a hotel stay in September, with that cost dropped dramatically by 17.8% (after rising by 14% in August).
Since the start of the year the consumer price index has risen by 1.9%, and annual inflation is expected to reach 2.5% by year’s end, within the government’s target of 1-3%.
The past four months, however, had shown a trend of accelerating inflation, rising at a 4.5% annual rate. In response, the Governor of the Bank of Israel, Stanley Fischer, raised the interest rate last month to 3.75%. Prior to that, the rate had remained at 3.5%, a record low, for eight months.
If the shekel-dollar exchange rate remains stable, September’s lower inflation trend may continue. A 0.3% rise in the CPI is expected for October, to be followed by a 0.1% rise in November.
Fischer will be announcing November’s interest rate on October 24.