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September price index drops 0.3%
Consumer price index drops despite predictions it would rise by up to 0.3%, expected to stay down
Gil Kol
The consumer price index in Israel
dropped by 0.3% during the month of September following six months of inflation, the Central Statistics Bureau published Thursday.
The drop was contrary to predictions, which said prices would either remain the same or rise by up to 0.3%. Since the beginning of 2009 the index has increased by 3.4%.
Also in September, the dollar's value decreased by 1.4%, and the price of fuel increased by 0.5%.
The September index and the low indexes predicted for the next few months may prevent an increase in interest rates by the end of the month, despite the fact that most members of the Bank of Israel's board of directors supported an increase in interest rates.
Chief economist for the IBI investment firm, Ayelet Nir, warned that the index's depletion was a seasonal matter. "In the months of September-February, in a seasonal manner, the inflation subsides and prices go down," she says.
Nir explains that holiday sales kept prices from rising during Rosh Hashana and Sukkot. "We estimate that during October-December the prices will not rise, however the inflation rate will still be 3.8% for 2009," she says.
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