Analysts predict July’s CPI figure will push annual inflation higher but Bank Hapoalim expects inflation to fall sharply over the next year.
US markets heaved a sigh of relief last week when data for July showed annual inflation running at 8.5%, down from a 40-year high of 9.1% in June. This is still almost double Israel’s annual inflation rate in June of 4.4% and tomorrow the Central Bureau of Statistics will report on the Consumer Price Index (CPI) for July.
The analysts’ consensus for the July CPI figure is a rose of 0.5%, after the CPI rose 0.45 in June. This would push annual inflation up to 4.5%, the highest figure since 2008, and well above the Bank of Israel’s annual target range of between 1% and 3%. But some economists expect the July CPI figure to be even higher.
Bank Hapoalim chief economist Modi Shafrir and Leader Capital Markets analyst Yonatan Katz both forecast that the CPI rose 0.7% in July, which would mean an annual inflation rate of 4.8%.
However, Bank Hapoalim see inflation peaking in July with the August CPI figure falling 0.1%, with the annual inflation figure falling to 4.4% and then falling further to 4.25% in September. Bank Hapoalim’s prediction for inflation over the next 12 months is 2.6%, even assuming that the NIS 1.00 excise tax cut per liter on fuel is canceled.
Published by Globes, Israel business news – en.globes.co.il – on August 14 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
Inflation Credit: Tali Bogdansky
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