Saturday 21 May 2022

Inflation in Israel records new high for decade

The Consumer Price Index in December was higher than expected; housing prices have risen 10.6% over the past year.

Israel's Consumer Price Index (CPI) rose unexpectedly by 0.3% in December 2021, the Central Bureau of Statistics reports, above the analysts' expectations of 0.1-0.2%. During 2021, the CPI rose by 2.8%, within the Bank of Israel's target range for inflation of between 1% and 3%.


Inflation hit its highest rate for a decade in 2021, after negative inflation of 0.7% in 2020 due to the Covid crisis.


There were significant price rises in December in footwear and clothing (1.1%), housing costs (0.8%), furniture and household equipment (0.7%), and food (0.5%). There were significant price falls in fresh fruit and vegetables (2.7%) and culture and entertainment (0.8%).


The housing prices index, which is separate from the CPI, continued to rise in the period October-November, in comparison with September-October, climbing by 1.4%. Housing prices have risen 10.6% over the past 12 months, and by 18% since the start of 2019.


Israel is in the midst of an “economic war,” Manufacturers' Association president Dr. Ron Tomer warned this week as businesses continue to struggle due to the meteoric increase in Omicron infections across the country. 


"More than 51 ships are waiting outside the ports, and many workers are not coming to work,” Tomer said. “Soldiers need to be brought in to operate the five available docks. We are in an economic war. Military drivers or reservists must be recruited to maintain operational continuity."


According to Tomer, the current wave of coronavirus infections poses challenges that have yet to be seen in Israel.


“One-to-two million infected people a month will reduce the workforce by a quarter,” he said. “It is difficult to continue without monetary compensation and without practical preparation on the ground.”

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