Israeli food prices racing ahead of OECD

supermarket  picture: thinkstock
supermarket picture: thinkstock

A Knesset report finds that prices rose 34% in Israel between 2005 and 2013, much more than the OECD average.

The Knesset Research and Information Center has published a report revealing just how much food prices have risen in Israel in the past eight years, and how burdensome the cost of living in Israel has become. The report was prepared at the behest of the Knesset Finance Committee, ahead of a discussion by the committee tomorrow. It compares the cost of living in Israel and changes in product prices to figures from the OECD countries.

According to the report, between 2005 and 2015, food prices in Israel shot up 34.1%. Less than a decade ago, in 2005, food prices in Israel were below the OECD average. By 2013, they were 10% above it.

Prices were especially high in segments with a concentration of ownership. Prices of soft drinks, for example, were 56% higher than the OECD average. In comparison with the EU, the gap was even wider, at 68%. In dairy products, for which in Israel there is a system of controlled quotas, and price controls on some items, prices are 51% higher than the OECD average, and 59% above prices in the EU. The only category in which prices are lower in Israel compared with the OECD is fresh produce.

The steepest price rise occurred in 2009, when food prices rose 15.9%, while the average salary rose just 2.3% in real terms that year.

Food is not the only category in which Israelis pay more. The comparative figures relate to 2011, but there is no reason to suppose that the gaps have narrowed since then. Telecommunications prices emerge as 29% higher in purchasing power terms than in the OECD, and 31% higher than in the EU. In the hotel and hospitality industry, the gaps are 26% against the OECD and 21% against the EU. Transport in Israel is 20% dearer than in the OECD, although slightly cheaper than in the EU. For clothing, the Israeli consumer pays 9% more than the average in the OECD countries, and 6% more than in the EU.

Published by Globes [online], Israel business news - - on October 27, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

supermarket  picture: thinkstock
supermarket picture: thinkstock
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