CPI down 0.4% in November

Israel's Consumer Price Index fell by 0.4% in November, bringing the rate of inflation for the year to date to minus 0.2%. Prominent price falls last month were in fresh produce (-5.9%), transport (-0.6%) and food (-0.4%). The clothing item rose by 2%.

The housing price index rose 0.9%, bringing the annual rate of price rises in housing to 8.7%. This follows a 1.3% rise in October.

More Investment House CEO Yossi Levy says that the main impact on inflation in 2017 will be from global commodity prices and a strengthening US dollar. When the dollar strengthens, commodity prices generally fall, but we are now in a situation in which these two factors are strengthening simultaneously, and they will put upward pressure on inflation. Levy points out that no significant price reductions arising from legislative changes are on the horizon, and these have had a considerable effect in the past few years, so that in the absence of any other factor depressing prices we will see annual inflation of around 0.8% next year, which is close to the government's target range of 1-3% which the Bank of Israel is supposed to meet.

Published by Globes [online], Israel business news - www.globes-online.com - on December 15, 2016

CPI down 0.4% in November

Prominent price falls last month were in fresh produce, transport and food. The housing price index rose 0.9%.