Israel: Inflation rises somewhat in December but stays below-target
Consumer prices were flat in December over the prior month, following November’s 0.4% decline. December’s reading was underpinned by higher clothing prices offsetting lower prices for fresh fruit and vegetables.
Inflation increased from 0.3% in November to 0.6% in December, but remained below the Bank of Israel’s 1.0%–3.0% target range for the seventh straight month. Core inflation, which excludes volatile energy prices, fell to 0.5% from 0.6%. Recent low inflation comes on the back of weak oil prices and a strong currency. Despite this however, the Central Bank appears reluctant to lower rates, and is instead opting to intervene in the FX market in a bid to support the currency and price pressures.