The Consumer Price Index (CPI) rose 0.9% in April, the Central Bureau of Statistics reported this evening. This is in line with expectations with most analysts predicting a rise between 0.8-1%. Inflation over the past 12 months was 2.1%. Trend figures indicate a current rate of inflation of 3.2%, slightly above the government target range of 1-3%. April traditionally sees a large jump in the CPI.
The highest rises in April were in housing costs (not including home prices), which surprised and rose 0.8%, the price of electricity rates which rose 7.8%, clothing which rose 8.1%, and overseas travel which rose 4.9%. The price of tomatoes soared 23.5%, while the price of cucumbers fell 13%.
Despite the big jump, inflation is still not seen as endangering the economy and is under control. This will enable the Bank of Israel to continue its expansionist monetary policy, and this level of inflation will not require it to raise the interest rate. The Bank of Israel is more concerned about lower growth than inflation, due to the recession in Europe.
Published by Globes [online], Israel business news - www.globes-online.com - on May 15, 2012
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