Consumer prices in March climbed at faster-than-anticipated rate — CBS

Consumer prices in Israel in March increased at a faster rate than forecast, the Central Bureau of Statistics says.

The consumer price index (CPI), a measure of inflation that tracks the average cost of household goods, increases by 0.6% in March slightly above analysts’ expectations of between 0.4% to 0.5%. That’s after the February CPI monthly figure of 0.4%

The March print brings annual inflation over the past 12 months to 2.7%, up from 2.5% in February, and 2.6% in January. The government’s annual target range of inflation is between 1% to 3%.

In March, increases were seen in the cost of cigarettes, which were up 7.1%, clothing and footwear rose 2%, culture and entertainment increased 1.5%, and housing prices edged up 0.6%, according to the statistics bureau. These were offset by notable declines in the price of fresh vegetables and fruits which fell 3%.

Rents on renewal of contracts rose 2.7% in March and rents on contracts for new tenants went up 2.6%.

Back in January, the Bank of Israel cut its base lending rate for the first time in almost four years, to support households and businesses as the economy was getting battered, due to the Hamas war, and as the inflation environment was easing.

Since then, the central bank has left interest rates unchanged at 4.5%. Bank of Israel governor Amir Yaron said last week that as long as regional tensions stabilize, and inflationary pressures ease, the central bank could return to a path of lowering borrowing costs. At the same time, Yaron cautioned about risks that could fuel inflationary pressures including, higher government spending due to the developments of the war, a weaker shekel, and global oil prices.