Capital market analysts estimate that the Consumer Prices Index (CPI) rose by 0.2% in November, according to a survey of analysts' forecasts by Bloomberg. The index rose 0.1% in October. The Central Bureau of Statistics will publish the November figure at 18:30 this evening (Thursday).
If the estimate proves correct, annual inflation will be running at 2.8%, which is within the government's price stability target range of 1-3%. The curtailing of inflation gives the Bank of Israel room to lower its interest rate in the face of the economic crisis in Europe, as Governor of the Bank of Israel Stanley Fischer hinted in his remarks to the "Globes" Israel Business Conference this week.
"The CPI rose 0.2% in November, and will rise 0.1% in December; over the next 12 months, the CPI will rise 1.9%," analyst Yaniv Pagot of Ayalon Investment House estimates.
According to Pagot, the rise in the CPI for November will mainly be due to rising prices of fresh produce, and a 4.7% hike in electricity tariffs. He believes that the housing item will show a 0.3% fall for the month.
"The Bank of Israel's decision to lower its interest rate last month means it need the appropriate signals from the inflationary environment in order to be able to continue lowering the rate, in line with global developments," Pagot says.
Published by Globes [online], Israel business news - www.globes-online.com - on December 15, 2011
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