12-month inflation is now within the government's price stability target range.
The Consumer Price Index fell by 0.3% in September.The figure is a surprise - analysts had expected a rise of up to 0.2%.
The biggest price falls in September were in produce (-4.1%) and clothing and footwear (-5.0%). Housing prices rose 0.7% in September itself, and 10.4% in the twelve months to the end of September.
Inflation since the beginning of 2009 now stands at 3.4%, still above the 1-3% price stability target set by the government, but inflation over the past twelve months was only 2.8%.
The September inflation figures mean that the Bank of Israel is unlikely to raise its interest rate for November. The price rises seen earlier in the year were in large part due to government action, such as the rise in the rate of VAT and the special water levy, but their inflationary effect is now over.
Published by Globes [online], Israel business news - www.globes-online.com - on October 15, 2009
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