Israel Inflation Slows in November as Gasoline Price Drops
Inflation slowed to 1.4 percent, the lowest since July, the Jerusalem-based Central Bureau of Statistics reported today. The median estimate of 12 economists surveyed by Bloomberg was 1.8 percent, with none lower than 1.7 percent. In the month, consumer prices fell 0.5 percent.
“We are seeing a weakening in consumer sentiment,” Aholiav Levy, an analyst at Ramat Gan, Israel-based Excellence Nessuah Investment House Ltd., said prior to the announcement. “In every retail sector in which there is real competition, we see prices moderating.”
The Bank of Israel monetary policy committee, led by Governor Stanley Fischer, has gradually reduced the borrowing rate from 3.25 percent in 2011 in an effort to shore up the economy amid the European debt crisis. The committee left the benchmark interest rate unchanged at 2 percent at the end of November.
Gasoline and car oil prices dropped 4.3 percent in November, the bureau said. Fresh vegetable prices declined 12.8 percent, while telephone and Internet service costs fell 1.7 percent.
Israeli growth is expected to slow to 3.3 percent this year from 4.6 percent in 2011, according to central bank estimates. About 40 percent of Israel’s gross domestic product is made up of exports, with Europe one of the largest markets.
Economists’ 12-month inflation expectations fell to 1.9 percent on average from 2.2 percent the previous month, the central bank said on Nov. 19.The government’s target is 1 percent to 3 percent.
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