Israel’s inflation rate hits highest level in 20 years

by | Feb 15, 2023 | Economy | 0 comments

The Central Bureau of Statistics of Israel reported this evening that the Consumer Price Index (CPI) increased by 0.3% in January, which is above the market’s expectation range of 0.1% and 0.2%.

The CPI for the past 12 months has increased by 5.4%, making it the highest inflation rate in Israel in the past 20 years.

Significant price increases occurred in January for things like healthcare (up 1%) and groceries (up 1%).

While significant price falls were registered in clothing and footwear (-4.9%), fresh vegetables (-1.9%), and culture (-1.6%), a substantial rise was observed in apartment maintenance (1.4%), healthcare (1%), and in food (0.9%).

Though housing prices are not included in CPI calculations, this data was also made available tonight. According to the report, home prices saw a 17.1% increase on a rolling twelve month basis, which marks a mild slowdown in price gains in the sector.

The latest CPI will be considered by the Bank of Israel when deciding on the interest rate that will be announced next Monday. And, with the shekel losing ground against the dollar in recent days due to the risks associated with the legal reform, analysts are concerned that the central bank will take a more aggressive approach and raise it by 0.5% rather than the previously anticipated 0.25%. Because the majority of goods imported into Israel are denominated in USD, the Bank of Israel may take a more hawkish stance in order to keep inflation under control.


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