Israeli CPI Falls – Except for Housing

Construction work on new homes outside Afula. Photo by Nati Shohat/Flash90
Construction work on new homes outside Afula. (Nati Shohat/Flash90)

The consumer price index in Israel fell yet again in March – the fifth month in a row that this has occurred – indicating that the Israeli economy is falling into step with the general economic slowdown in the rest of the world. The general index fell 0.2 percent in March, with prices overall falling 1 percent since the beginning of 2016, the Central Bureau of Statistics said. Over the last 12 months, prices have fallen 0.7 percent, taking into account CPI rises in 2015.

Among the big drops were fresh fruit and vegetable prices, which fell 3.9 percent. Transportation prices fell 1 percent, and food other than fresh fruits and vegetables was down by 0.5 percent. Rising in cost was rental housing (not including real estate purchases), which was up 0.4 percent, as well as leisure activities, which rose 0.7 percent.

While the CPI in January and February is traditionally low, as the winter weather keeps shoppers at home and prompts sale prices from retailers, the March CPI has traditionally been higher, so these statistics came as somewhat of a surprise to economists.

Real estate purchase prices are not included in the CPI, but even these were leveling off, as separate CBS statistics showed. Prices were up in January and February, but only by 0.1 percent each month. That is negligible compared to January-February 2015, when prices were up 7.2 percent over the closing prices of 2014.