Israeli consumer prices probably rose in June as clothing and shoe stores restocked for summer after clearance sales ended, and hotels and airlines entered the peak vacation season.
The consumer-price index advanced 0.4 percent from the previous month, according to the median estimate of 14 economists surveyed by Bloomberg. Annual inflation rose to 4.2 percent from 4.1 percent, according to the survey. The Jerusalem-based Central Bureau of Statistics is scheduled to release the data at 2 p.m. local time tomorrow.
Israeli consumer prices have surged as the economy recovers from the global recession faster than most advanced countries. Inflation exceeded the government’s 1 percent to 3 percent target for a fifth month in May, and is likely to do so again in June, according to the survey.
“Inflation in annual terms will probably stay high for the three months beginning in June,” Michael Sarel, chief economist at Harel Insurance Investments & Financial Services Ltd. in Ramat Gan, said in a telephone interview yesterday. “From September we will see inflation begin to decline.”
Bank of Israel Governor Stanley Fischer held the interest rate at the end of June at 3.25 percent, after raising the benchmark 10 times in the past two years. He is unlikely to increase the rate again at the end of July, according to 13 of 15 economists surveyed by Bloomberg at the end of June and beginning of July.
Slowing growth, the appreciation of the shekel and the increase in interest rates are all working to bring the inflation rate down, Sarel said. Inflation is likely to slow to within the government’s target range in the first quarter of 2012, he said.
“Inflation is peaking or has peaked,” Daniel Hewitt, senior emerging-market economist at Barclays Capital in London, said in a telephone interview yesterday. Global food and energy costs as well as Israeli wholesale food prices have reached their highest point and are declining, he said.
Economic growth may be slower in 2011 than the bank’s forecast of 5.2 percent, because the expansion in the second quarter may have been less than expected, Fischer said July 7. Economic indicators published ahead of the last interest-rate decision support the assessment that growth slowed in the second quarter from the previous three months, according to minutes of the decision released July 11.
Seasonal increases in clothing and vacation prices in June were probably offset in part by a decline in fruit and vegetable prices and the cost of gasoline, Victor Bahar, an economist for Bank Hapoalim Ltd. in Tel Aviv, said yesterday in a telephone interview. Inflation for the next 12 months is likely to decline to 2.8 percent, he said.