Isranomics

Israel’s inflation rate climbs to 5.1% in October

by | Nov 15, 2022 | Economy | 0 comments

Israel’s inflation rate jumped more than predicted to 5.1% over the previous 12 months in October, up from 4.6%, and is expected to provoke a greater response from the Bank of Israel (BOI) on November 21. 

According to the Central Bureau of Statistics, the consumer price index (CPI) increased 0.6% in October compared to September, showing little signs of cooling.

Substantial price increases were noted in the vegetables and fruits sectors, which increased by 4.1%, footwear and clothing by 4%, food by 1%, housing and transportation by 0.6% apiece, and apartment maintenance by 0.4%. Among the causes for the rises are the broad economy’s price increases and the shekel’s recent weakness against the dollar.

Significant price reductions took place in the health, culture & entertainment, and furniture sectors.

Separate from the consumer price index, the Central Bureau of Statistics also published changes in residential prices. The current figure indicates a 1.1% gain, which represents a 19.8% increase over the same period last year (August-September 2021). This is the largest annual price increase in a decade, further driving the real estate market into bubble territory.

Today’s inflation report will provide the BOI with food for thought when it meets next Monday to make its interest rate decision. With the current rate of 2.75%, the market anticipates another increase of at least 0.50%. However, there are a few aspects that the BOI must take into account, such as tomorrow’s announcement of economic growth and the Fed’s likely shift from its present aggressive position on raising interest rates in the United States.

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