Bank of Israel Governor Prof. Amir Yaron last night told the Aaron Institute for Economic Policy at Reichman University (formerly IDC Herzliya) conference hinted that the central bank will be raising its forecast for annual inflation. He said, “We have not yet published our latest forecast but it wouldn’t surprise us if (annual) inflation in the coming months will be above 4%.”
He added, “But what is important is that in the first quarter of 2023, we already see a dramatic fall in inflation and by the second quarter we already see it entering the inflation target range.”
RELATED ARTICLES
CPI up 0.8% in April
Inflation in Israel today is already 4% annually, which is 1% above the top range of the annual target of the Bank of Israel. “It is better to look at the global perspective. Compared to overseas, we are in the lowest decile for inflation, significantly lower than what is happening around the world. For example, in the US inflation is 8.3% and the median inflation in the OECD is 7.5%. Nevertheless, our inflation is above target. We are very attentive to this and determined to bring it back to the target range.
“Why is our inflation so low? First of all, we are unfortunately starting from a base of high prices. The cost of living in Israel is high in the field of food, for housing, transport, and more. In addition the shekel exchange rate is strong and this also contributes to the fact that our inflation is lower.
“Wage agreements have also helped moderate the pace of rises and the exit from the crisis. I want to say that from the Israeli experience, in discussions about wage agreements in all sorts of fields, it is very important not to introduce a mechanism for linking salaries. We know what happens with inflexible mechanisms, which bring a dynamic that could very much damage, in the area of inflation. It’s fine to have negotiations but a linkage mechanism must not be established,” Yaron said referring to current negotiations between the Ministry of Finance and the Teachers Union and Histadrut.
Published by Globes, Israel business news – en.globes.co.il – on June 8, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
