Food prices up 1.1% in February
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CPI remains unchanged in February
Fresh fruit prices increase by 7.6%, while vegetable prices go down 2.3% and clothing prices fall 5.9%. Significant price hikes recorded in food products, furniture, transportation and health services
The consumer price index (CPI) remained unchanged in February, the Central Bureau of Statistics (CBS) said Friday, in accordance with analysts' forecasts.
According to the CBS, significant hikes were recorded in the prices of food and furniture (1.1%), transportation (0.7%) and health services (0.5%). Significant reductions were recorded in the prices of communication services (1.8%, with a 2.8% in cellular phone prices) and housing (0.4%).
Fresh fruit prices increased by 7.6% last month, but this figure was compensated by a 5.9% drop in clothing and footwear prices and a 2.3% reduction in vegetable prices.
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Within the food section, hikes were mostly recorded in the prices of fresh poultry (15.6%), chicken legs (6%), fresh fish (5.4%) and crackers (3.8%). Noodle prices saw a reduction of 4.7%.
Rise in housing prices
As for housing prices, the CBS noted that "a comparison between transactions executed in December 2012 and January 2013, and transactions carried out in November and December 2012, shows that apartment prices increased by 1.7%."
Although this indicator is not included in the CPI, it is examined on a monthly basis.
The CBS added that "this figure is not final as there are additional transactions which were carried out during that period but have yet to be reported. According to a comparison between transactions carried out in December 2012 and January 2013, compared to December 2011 and January 2012, prices increased by 8.6%."
The general index has gone down by 0.2% since the beginning of the year. In the past 12 months, the general index and the index excluding fruits and vegetables both increased by 1.5%.
The February CPI is the second index published by the CBS after the biennial update of the "consumption basket" composition conducted in early January.
'Positive CPI expected in March'
Yaniv Pagot, chief strategist at the Ayalon Investment House, said in response: "We estimate that the negative CPIs are coming to an end and that we will see a positive CPI in as early as March."We believe that in the developing reality in the housing market, the Bank of Israel is basically unable to reduce the interest rate," he added. "Lowering the interest rate at this time will mean taking a big risk in a reality in which the government fails to increase apartment supplies."
According to Pagot, "Despite the apparent slowdown in the economy and the moderate inflation rate, the ongoing process of cutting the interest rate will be postponed to a scenario of a further slowdown. The Bank of Israel will be required to adopt an updated strategy to handle the shekel's appreciation against the dollar.
"The fact that the bank will find it difficult to cut rates in the short run perpetuates the major gap in interest rates between the shekel and the dollar, and supports the strength of the shekel which threatens the growth of local exports."
