| Alex Zabrzynski, Chief Economist of Meitav Dash
For the month of May it rose by 0.6% compared to our forecast for an increase of 0.7%.
All the main items in the index rose, with the largest contribution to the increase in the price index being that of the food item (0.15%), fruit (0.15%, with watermelon alone contributing about 0.06%) and travel abroad (0.12%).
The rate reached 4.1%, the highest since 2011. The rate of increase in the index excluding energy rose from 3.5% to 3.8%.
The rate of inflation continues to rise in the items of food, vegetables, housing, apartment maintenance, education. The rate of decline in communications prices continues to moderate.
The clothing section continues to be very unusual, according to which in the last two years clothing prices have fallen in Israel by 8.2% compared to an increase of 11% in the US, 8% in the UK and about 3% in Europe. At a price in the world and between Israel.
The rate of increase in the housing section rose to 3.7%, the highest in a decade. The CBS published weights of different groups measured in the rent section, which is the smaller weight section in the housing section.
It turns out that 90% of the clause consists of tenants who are under an existing contract whose price usually does not change during the year. It is more surprising, however, that in the section on tenant-owned housing services, which is the main weight in the housing section and reflects a change in the prices of new contracts signed in the last month compared to contracts signed in the previous month, there was only a 0.1% increase in the last two months.
According to the CBS report that in renewable contracts prices have risen by 1% and in the exchange of tenants the price has risen by 5%, we have raised the forecast for the housing section to increase by 4.5% in the coming year.
There are also some price reductions – the rate of increase in the price index for the fuel-free manufacturer fell from 9.5% in March to 7.5% in May. The annual rate in the culture section and in the health section has decreased.
Looking ahead, the economy’s inflation environment continues to be high and is affected by a tight labor market, strong demand and rising import prices. The forecast:
- We expect the June index to rise by 0.3%. It will be mainly affected by rising fuel, food and housing prices. On the other hand, clothing and fruit prices are expected to fall for seasonal reasons.
- The July index is expected to rise by 0.3%.
- The inflation forecast for the next 12 months is 3.5%.
The writer is the chief economist of Meitav Dash Investment House. This analysis is intended for the purpose of providing information only, and in no way should it be considered an opinion, offer, recommendation or advice / marketing for the purchase and / or holding and / or sale of securities and / or the financial assets described therein. The information contained in this review does not purport to contain all the information necessary for a potential investor and does not purport to constitute a complete analysis of all the facts and details appearing therein. This review is not a substitute for investment advice / marketing that takes into account the data and special needs of each person. Meitav Dash Brokerage, and its sister companies and other companies in the Meitav Dash Investments Ltd. group and / or stakeholders for any of the companies listed above and their clients, may have an interest in the securities and / or financial assets included in this review.