According to a statement from the Central Bureau of Statistics on Sunday, consumer prices in Israel in September surprised to the downside. This is increasing the odds that the Bank of Israel will start to lower interest rates later this month as the war with the Hamas terror group intensifies.
The consumer price index (CPI), a measure of inflation that tracks the average cost of household goods, unexpectedly decelerated 0.1% in September, compared with analysts’ expectations of an increase of between 0.1% and 0.2%, and after rising 0.5% in August.
In September, notable declines were seen in the cost of transportation, which fell 1.5%, and food, culture and entertainment components decreased by 0.5%, each. These were offset by price increases – among others - of fresh vegetables and fruit, which rose by 4.3%.
Hamas’s attacks on southern Israeli communities, which has led to a war with in Gaza, is expected to cause significant damage to the Israeli economy and growth prospects, but could further bring down inflation as consumers tend to spend less and prices begin to fall.
Source: timesofisrael.com