Israeli Inflation Rate Probably Declined in May: Week Ahead
Israel’s inflation rate probably fell in May to its lowest in 18 months as the global economy contracted and import prices fell, a survey showed.
The rate dropped to 2.8 percent from 3.1 percent in April, the second consecutive decline, according to the median estimate of eight economists surveyed by Bloomberg. The Jerusalem-based Central Bureau of Statistics will report the data at 6:30 p.m. on June 15.
“Commodity prices have dropped from last year,” said Yaniv Hevron, an economist at Psagot Investment House Ltd. in Tel Aviv. “The slowdown is also having an effect. There is deflation in the U.S., Europe and China, so we are seeing a drop in import prices.”
The inflation rate has fallen from a peak of 5.5 percent in September and October, enabling Bank of Israel Governor Stanley Fischer to lower the benchmark lending rate by 3.75 percentage points to a record low of 0.5 percent. As global markets recover, inflation may become a concern again and central banks must be willing to raise rates, Fischer said on June 10 personal loans for poor credit.
Prices rose 0.4 percent in May from April, according to an average of eight economists surveyed.
Inflation will probably be within with the 1 percent to 3 percent target range over the next 12 months, the central bank said in the minutes of the last rate-setting meeting, released June 8. Prices are expected to rise 2.2 percent over the next year, according to a Bank of Israel survey of economists included in the minutes.
Last week, the benchmark Mimshal Shiklit bond due in February 2017 dropped 0.5 percent to 101.82, with the yield climbing 10 basis points to 5.46 percent. The Tel Aviv Stock Exchange’s benchmark TA-25 Index fell 0.2 percent to 880.27.