Israel: Consumer prices record smallest fall since July in November
December 15, 2020
Consumer prices fell 0.20% from the previous month in November, swinging from the 0.30% rise logged in October. November's result marked the sharpest fall in prices since May. The result was driven by moderating price pressures for food and education, culture and entertainment.
Consumer prices declined 0.6% on an annual basis in November, a smaller drop than October’s 0.8% fall. November's result represented the smallest decrease in consumer prices since July. The annual average variation of consumer prices fell to minus 0.5% in November (October: -0.4%). Core consumer prices fell 0.1% on an annual basis in November, which was a more moderate fall compared to October's 0.4% decrease.
November’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, only rising back into the lower part of the Bank’s 1.0%–3.0% target range in H2.
Author: Oliver Reynolds, Economist