Israel Inflation December 2020

Israel

Israel: Consumer prices drop at quicker rate on an annual basis in December

January 15, 2021

Consumer prices fell 0.10% from the previous month in December, a softer drop than the 0.20% fall seen in November. Looking at the details of the release, prices for food fell in December. However, prices for transportation and communication rose.

Consumer prices decreased 0.7% year-on-year in December, following November’s 0.6% fall. The annual average variation of consumer prices fell to minus 0.6% in December (November: -0.5%). Lastly, core consumer prices fell 0.2% on an annual basis in December, which was a sharper fall than November's 0.1% decrease.

December’s reading leaves the overall picture little changed: price pressures remain extremely low, amid the strong shekel and shaky demand. This will reinforce the Central Bank’s loose monetary stance ahead. Turning to 2021, inflation is seen returning but remaining extremely subdued as shekel strength continues to weigh on prices, with inflation only rising back into the lower part of the Bank’s 1.0%–3.0% target range in H2.

FocusEconomics panelists see consumer prices rising 0.7% in annual terms in 2021, which is unchanged from last month’s forecast. Our panelists see inflation of 1.1% in 2022.


Author:, Economist

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Israel Inflation Chart


Israel Inflation December 20 20

Note: Year-on-year and month-on-month variation consumer price index in %.
Source: Central Bureau of Statistics (CBS).


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