Israeli Inflation Stays Below Target Mid-Point for Sixth Month
Israeli inflation remained below the mid-point of the central bank’s target range for a sixth month in March as growth moderates and global inflationary pressures remain subdued.
The inflation rate declined to 1.3 percent, from 1.5 percent in February, the Jerusalem-based Central Bureau of Statistics reported today. The median estimate of 13 economists surveyed by Bloomberg was 1.4 percent. The government’s target is 1 percent to 3 percent. In the month, consumer prices rose 0.2 percent.
“GDP is decelerating,” said Daniel Hewitt, senior emerging-market economist at Barclays Plc, prior to the announcement. “Globally, inflationary pressures appear muted. There is less pressure on prices everywhere.”
The Bank of Israel monetary policy committee, led by Governor Stanley Fischer, kept the benchmark interest rate unchanged at 1.75 percent at the end of March, the lowest in almost three years. The central bank has gradually reduced the rate from 3.25 percent in 2011 in an effort to shore up the economy amid the European debt crisis.
Economic growth is forecast to slow to 2.8 percent this year, from 3.1 percent in 2012, excluding first-time natural-gas revenues, according to the central bank. About 40 percent of Israel’s gross domestic product is made up of exports, with Europe one of the largest markets.
Economists’ average 12-month inflation expectations declined to 1.8 percent, the lowest since 2009, according to a central bank survey released March 17.
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