Israel: Consumer prices are flat in annual terms in February
March 15, 2021
Consumer prices rose 0.30% from the previous month in February, swinging from January's 0.10% fall. February's figure was the sharpest increase in prices since March 2020. Looking at the details of the release, education, culture and entertainment prices rose at a quicker pace in February compared to the previous month, while price pressures for transportation and communication also picked up pace. In addition, prices for clothing and footwear gained steam.
Consumer prices were flat in February in annual terms, contrasting January’s 0.4% fall. The annual average variation of consumer prices fell to minus 0.7% in February (January: -0.6%). Lastly, core inflation rose to 0.3% from January’s 0.1%.
February’s reading will be welcome news to the Central Bank, which battled deflation for much of 2020. Looking ahead, inflation should return and rise back to the lower part of the Bank’s 1.0%–3.0% target range later this year, thanks to a favorable base effect, strong domestic demand and higher international commodity prices.
Author: Oliver Reynolds, Economist