CPI up 0.8% in April

Supermarket shopping  credit: Tamar Matsafi
Supermarket shopping credit: Tamar Matsafi

Inflation for the twelve months to the end of April was 4%.

The Consumer Price Index (CPI) rose 0.8% in April, which is in line with analysts' estimates. According to the figures released by the Central Bureau of Statistics today, the rate of inflation over the 12 months to the end of April was 4%, which is higher than the government's target range of 1-3%. The inflation rate has been above target for the past three months, and is the highest since 2011.

The nationwide average rent rose to NIS 4,153.6 in the first quarter of this year from NIS 4,112.6 in the previous quarter.

The Construction Inputs Index rose 1% in April, and is up 6.8% for the twelve months to the end of April.

Home prices rose 1.9% in February-Match in comparison with January-February. In the five months to the end of March, housing prices rose by 9.3%, making it a 16.3% rise in twelve months.

Analysts say that the Bank of Israel will not be able to ignore these figures. "Although recent figures started to indicate a degree of slowdown in economic activity, it is still probable that the Bank of Israel and the Ministry of Finance will not be able to remain indifferent to the accelerating rate of price rises, although the political situation will block significant policy measures, leaving the ball in the Bank of Israel's court," IBI economists write. "Inflation is higher than the target range, but it is low by global comparison, and does not present the Bank of Israel with any special dilemma. The bank can be expected to raise its interest rate by 25 basis points to 0.6% in its decision next week."

Leader Capital Markets chief economist Yonatan Katz believes that the Bank of Israel will decide on a larger interest rate hike, of 0.4%. "Without doubt, the inflation environment has risen, arising not only from supply factors but also from demand factors and wage pressures. The acceleration in the rate at which housing prices are rising will be a concern for the Bank of Israel. Furthermore, the economy is on an expanding track, the GDP gap has been closed, and the economy is at full employment."

Published by Globes, Israel business news - en.globes.co.il - on May 15, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

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