Israel: Inflation returns in March
Consumer prices rose 0.60% from the previous month in March, accelerating from February’s 0.30% rise. March’s result was the sharpest increase in prices since May 2019. The pick-up was broad-based, with greater price pressures recorded for food, transportation and communication, and education, culture and entertainment. In addition, prices for clothing and footwear gained steam.
Consumer prices rose 0.2% in annual terms in March, contrasting February’s flat reading. The annual average variation of consumer prices edged up to minus 0.6% in March (February: -0.7%). Lastly, core inflation edged down to 0.2% from February’s 0.3%.
March’s reading will be welcome news to the Central Bank, which battled deflation for much of 2020. Looking ahead, inflation should 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.