The Bank of Israel today announced that the 12-month average inflation forecast has risen to 2.5% from 2.4% in June. In January, the12-month average inflation forecast was just 0.3%, and the current forecast is the highest since the 2.8% forecast in September 2008.
Inflation expectations derived from capital market data are calculated as the difference between the yield to maturity on non-indexed bonds, which represents the nominal yield, and the yield on CPI-indexed bonds, representing the real yield.
Bank Hapoalim revised its inflation forecast for 2009 upward today to 3.2% from 2.6%. The bank also raised its 12-month inflation forecast to 2.6%. "The inflationary effects of the policy measures undertaken are being somewhat offset by the ongoing economic slowdown," says the bank.
Commenting on the Consumer Price Index (CPI) for June published yesterday, Leader Capital Markets chief economist Rafi Gozlan said, "Despite the unexpected rise in the CPI for June, we do not expect an interest rate hike."
Published by Globes [online], Israel business news - www.globes-online.com - on July 16, 2009
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