The Marker, Abby Waxman, 16.03.2020
The CPI fell 0.1% in February 2020 compared to January. Forecasters expected a 0.1% -0.2% decline. However, house prices rose 0.8% in the period from December 2019 to January 2020, compared to November-December 2019.
The index data is correct for February, where the effects of the Corona crisis on the economy were still moderate. Bank Hapoalim's economic department said today: "Measuring inflation is becoming more difficult because some services - such as flights, restaurants and hotels - do not currently exist." The March indices and subsequent months are expected to be affected by two events that have occurred in recent days - the oil price dip, which is contributing to a fall in inflation, and against the sharp weakening of the shekel, which is contributing to the rise in inflation. "The inflation outlook in the markets now is very low and stands at about 0% for the year ahead," Bank Hapoalim said.
In 2019 inflation measured only 0.6%, and this was the sixth consecutive year that inflation was lower than the Bank of Israel's target range (1% -3%). Now, the decline in the February index has lowered actual inflation (the change in the CPI in the last 12 months whose data is known) from 0.3% in January to only 0.1% in February.
The CPI in February saw noticeable price declines in the apparel (3.8%) and communications (1.1%). Fuel and oil prices for vehicles fell by 2.8%, and travel prices abroad and flights in Israel by 0.9%. In contrast, fresh fruit prices rose 4.6%. %, And bathing and cosmetic needs increased by 1.4%.
The whole vegetable and fruit section increased by 1.6%. The food section (excluding fruits and vegetables) and the housing section (which does not weigh housing prices but mainly rent) remained unchanged.
In addition, in the housing price index (which is not weighted in the CPI), a relatively sharp monthly increase of 0.8% was recorded in the period between December 2019 and January 2020, compared with November-December 2019. According to data published by the Central Bureau of Statistics, The latter climbed house prices by 4%, compared with a 3% annual increase reported a month ago and 3.4% two months ago.The prices of new dwellings have increased by 1.1% monthly, but on a yearly basis they have fallen by 1.6%.
Monthly increases in housing prices were measured in all the state's districts - 1.6% in the Jerusalem District, 1.1% in the South, 1% in the North, 0.8% in the Central District, 0.6% in the Tel Aviv District and 0.3% in the Haifa District.Year-on-year prices have also risen in all districts, especially in Tel Aviv (6%), North (5.6%) and Jerusalem (3.7%).
The index of input prices for residential construction remained unchanged in February compared to January. In the past 12 months, it has risen 0.5%. This measure is used to link certain payments in new property sales transactions.