Weaker shekel and wage pressure support higher inflation

ISRAEL - Report 07 May 2018 by Jonathan Katz

Shekel weakness is expected to push inflation higher this year, to the low end of target. Wage growth is also accelerating, because of a tight labor market and minimum wage hike. The fiscal deficit is likely to reach the target this year (despite positive numbers through April), and a tax cut appears unlikely.

Zoom in: The total FX pass-through on inflation is estimated at 36% by the BoI.

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