Inflation creeps higher to -0.4% y/y

ISRAEL - In Brief 14 Oct 2016 by Jonathan Katz
Inflation in September increased to -0.4% y/y from -0.7% last month. This CPI print was in line with consensus, following a downward surprise last month. Inflation excluding energy moved lower to -0.3% y/y in September from -0.1% in August. Housing prices remains the main culprit impacting inflation, up 1.9% y/y and contributing 0.47% to annual inflation. The housing price is measured using rental prices as a proxy. Inflaition excluding housing is down -1.2% y/y in September from -0.9% y/y in August. Clearly Israel continues to enjoy low inflation (or deflation) despite a tight labor market and some wage inflation. Despite robust domestic demand (private consumption increased by 4.7% y/y in Q216), other factors have contributed to low inflation such as a strong shekel and increasing competition in several sectors including food products (down 1.6% y/y) and communications (-3.1% y/y).With inflation and inflationary expectations still way below target the BOI will be in no rush to push rates higher in the coming year, despite further likely Fed tightening. Widening rate differentials are expected to slow shekel appreciation.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this or its contents.