Fruit prices up 4.3%
Photo: Index Open
January CPI slightly exceeds expectations
Consumer price index rises by 0.2% following increase in fruit, transportation and housing prices. Bank of Israel governor expected to leave interest rate unchanged at 2.25%
The Consumer price index for the month of January rose by 0.2%, the Central Bureau of Statistics reported Tuesday.
The first CPI for 2011 was influenced mainly by the increase in the prices of fresh fruit (4.3%), transportation (2.1%), furniture and home products (1.5%), food (0.8%) and housing (4%).
These prices hikes were partially compensated by seasonal reductions in the prices of clothing and footwear (6.4%) and fresh vegetables (5.2%).
Opinions differ as to the expected inflation rate in 2011. The Bank of Israel's research department estimated recently that the inflation rate would total 2.6%, meeting the government's annual inflation target (1-3%). Analysts' predictions, however, put the inflation rate at an average of 3%, while the inflation expected from the capital market is even higher – 3.2%.
Capital market experts estimate that the slight increase in the January CPI will help Bank of Israel Governor Stanley Fischer leave the interest rate for the month of March unchanged at 2.25%.
The main reason is Fischer's fear that increasing the interest rate gaps between the Israeli shekel and US dollar and euro would lead to an additional appreciation of the shekel.
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