Israel: Consumer prices drop at quicker pace on an annual basis in October
October 15, 2020
Consumer prices increased 0.30% in October over the previous month, swinging from September's 0.10% fall. October's reading was the sharpest increase in prices since March. The bounce back in price pressures was largely due to rising prices for food, health and clothing and footwear.
Consumer prices fell 0.8% on an annual basis in October, following September’s 0.7% decrease. The annual average variation of consumer prices fell to minus 0.4% in October (September: -0.3%). Lastly, core consumer prices fell 0.4% on an annual basis in October, which was a larger drop compared to September's 0.3% decrease.
Extremely low price pressures—which in recent months have likely been driven by depressed domestic demand and the strength of the shekel—will reinforce the Central Bank’s loose monetary stance ahead. Turning to 2021, inflation is seen returning but remaining extremely subdued, only rising back into the lower part of the Bank’s 1.0%–3.0% target range in H2.
Author: Oliver Reynolds, Economist