A majority of analysts believe that the Consumer Price Index (CPI) was unchanged in February, according to a "Bloomberg" poll of 12 analysts. The Central Bureau of Statistics will publish the CPI for February tomorrow. The forecasts range from a drop of 0.1% to a rise of 0.2%.
If the zero forecast materializes, inflation for the preceding 12 months through February 2013 will be 1.5%, below the midpoint of the government's 1-3% inflation target.
The CPI in February was affected by the 4% rise in the price of fuel, mainly due to the 6% rise in price of oil in international markets. Food prices rose by 1%, mainly due to seasonal factors.
Psagot Investment House Ltd. says that the rise in the price of milk will affect the CPI in both February and March.
The housing item in the CPI (rent), the largest single item in the index (25%) is expected to be unchanged.
Items which are expected to lower the CPI in February include mobile services, the price of which continues to fall as subscribers switch to cheaper plans; and foreign travel, due to seasonal factors.
As for the interest rate, Psagot macroeconomist Ori Greenfeld says, "The Bank of Israel kept the interest rate for March unchanged, stating that it sees improvement in the global economic and domestic indicators. However, uncertainty about the global economy has increased since the interest rate decision, because of the results of the Italian elections and the sequester in the US. We therefore believe that the Bank of Israel will cut the interest rate to 1.5% at the end of this month."
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2013
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