Israel: Consumer prices register greatest decline since March 2004 in May
June 15, 2020
Consumer prices dropped 0.3% over the previous month in May, matching the 0.3% fall recorded in April. May's result marked the sharpest fall in prices since January. The reading was largely due to plunging prices for food. Meanwhile, price pressures for transportation and communication declined at a more moderate rate.
Consumer prices dropped 1.6% on an annual basis in May, a larger fall compared to April’s 0.6% drop. May's result represented the largest fall in consumer prices since March 2004. Annual average inflation fell to 0.1% in May (April: 0.4%). Core consumer prices fell 0.6% in May.
Price pressures are seen staying subdued on weak activity, and the recent appreciation of the shekel—if maintained—poses further a downside risk to prices.
Author: Oliver Reynolds, Economist