Consumer prices slow to increase, but the cost of living is still high — report
Employment figures are at a high, wages are up, but living in Israel is relatively expensive compared to other OECD countries, says annual Taub Center assessment
Stuart Winer is a breaking news editor at The Times of Israel.
The rate at which prices are rising in Israel is lower than the average in other developed countries, but the cost of living and inequality are still high, a new report has found.
The report, published Monday by the Taub Center, also found that employment in Israel is at a record high, and unemployment is at its lowest in years, leading to increased average income.
“In recent years the pace of price increases in Israel was significantly lower than the OECD rate,” the report said. “As a result, since 2014, consumer prices in Israel have fallen by 5.2 percent relative to the OECD average. This is surprising given the good state of the economy and the sharp increases in wages recorded in recent years, and is influenced by measures taken to increase domestic competition after the social protest in 2011.”
Nonetheless, prices remain significantly higher than expected in an economy with a similar level of income, “which harms the standard of living.”
The employment rate is at 78 percent and unemployment is at 3.4%, continuing a trend of improvement seen since 2003. In that period, among men, employment has gone up by 7%, and among women 13%, more than in all other OECD countries, the report said.
Wage increases and good employment figures have led to a rise in income and consumption, particularly among the middle and lower income quintiles, which increased by 16% and 13%, respectively.
However, inequality between high earners and those below the poverty line remained among the highest in the OECD, the report said.
Israel has recently seen a wave of price hikes in electricity, water, gas and cellphone bills, as well as food, drinks, insurance and property tax, leading to demonstrations.
