Consumer Prices Fall More Than Expected

Deflation is taking hold in the Israeli economy, according to data released by the Central Bureau of Statistics on Sunday.

The Consumer Price Index (CPI) fell 0.7% in February, CBS reported, surpassing expert predictions of a drop of no more than 0.6%. In the past 12 months, the CPI has fallen 1.5%, and is down 1.6% since the start of 2015.

February saw prices come down in household electrical appliances (9.9%), fuel and oil for vehicles (3.2%), internet and telecom services (2.7%), overseas travel (1.9%), and footwear (3.1%).

They were offset, though, by significant price rises in rents (0.2%), and fresh fruit (4.2%).

In other financial news, Bank Hapoalim unveiled on Sunday its new cost-cutting plan, which entails layoffs of 600-700 employees over a two-year period, Globes reported.

The announcement followed the bank’s financial report, published last Tuesday, which stated that the bank will provide NIS 390 million in the fourth quarter for streamlining, without giving details.

Hapoalim had 10,139 employees (as of the end of 2014) in its branches and headquarters.

Several methods will be used to eliminate jobs: a voluntary retirement program, cuts in temporary and contract workers, and retiring workers who will not be replaced.

The bank said that the streamlining plan is not confined to job cuts. “The streamlining plan includes possible changes in the structure of the bank’s business, reduction of physical space in its branches and offices, and retraining of workers whose positions are being eliminated in order to place them in other positions in the bank,” the bank wrote today.

The bank projects savings of NIS 80-100 million in expenses next year, and NIS 150-170 million annually starting in 2017.

This article appeared in print on page 7 of the March 16th, 2015 edition of Hamodia.