Bethel Finance news:
Capital market analysts expect that the Consumer Price Index (CPI) rose 0.1-0.3% in March. The Central Bureau of Statistics will announce the CPI for March on Friday. Analysts believe that the rise in price of oil, due to the upheavals in Arab countries, will have a decisive effect on the CPI.
The price of oil has climbed past $106 per barrel. The analysts estimate that this pushed up the price of gasoline and other fuels by over 2% in March, as well as the price of foreign travel.
The March CPI will also be affected by an estimated 0.5% rise in the housing item (rent), although analysts disagree. Rising commodities prices are also affecting food prices, which are expected to help push the CPI upwards for at least the next two quarters.
These rises will be partly offset by a steady drop in prices for clothing and footwear. Analysts expect that seasonal factors caused these prices to fall 4% in March. Prices for fruits and vegetables fell 2% last month as well.
If the predictions are realized, it means that inflation for the past 12 months was 4.2-4.5%, far above the government's 1-3% inflation target. Inflation is now running at an annualized 6.7%, which forced the Bank of Israel to raise the interest rate for April by 50 basis points last month to 3%.
In the aftermath of that interest rate hike, some analysts believe that the Bank of Israel will refrain from raising the interest rate for May, but wait a month until the next hike. A minority of analysts believe, however, that a time-out is unlikely, since Israel's real interest rate is still negative.
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