Ofer Klein 16.12.2021
Consumer Price Index for November Decreased 0.1 percent, slightly lower than earlier estimates. The sharp rise in the price of fuel and the high levy on disposable dishes (29%) were offset by a higher-than-expected decline in fresh-fruit-vegetable prices (minus 5.8%, with an emphasis on tomatoes and avocados) and a further decline in holiday and excursion prices (minus 10%). Inflation In the calculation of the last 12 months, it rose slightly to 2.4 percent and will rise slightly more next month (2.5%). But we estimate that over the next year the inflation rate will fall below the center of the inflation target (2 percent). This, along with the strength of the shekel, will allow the Bank of Israel a wide margin of maneuver. We anticipate that interest rates in the country will not rise at least until the last quarter of 2022 even when we see a rise in interest rates in the US (and we will see what Powell tells us about this tonight.)
Our initial forecast for the following indices; No change in the index December (A sharp decline in fuel versus an increase in purchase tax), and a minus 0.2 percent in January (an increase in the tax on sugary drinks and an increase in the price of electricity, as opposed to a decline in clothing and water prices). Our forecast for the next 12 indices is 1.7 percent – this forecast is still significantly lower than the forecast implied in the bond market.
The rate of increase in apartment prices has changed prefix
Housing Price Index Rose by another 0.9 per cent (between mid-September and mid-October) and cumulatively by 10.3 per cent in the last 12 months. The sharp rise At the prices of construction inputs (0.5 percent in October and 5.8 percent in the last 12 months) also contributed to the rise in apartment prices. We expect a continued rise in housing prices in 2022, but at a more moderate pace. On the part of the supply of apartments, in our estimation, the government will not be able to accelerate the pace of planning and significantly accelerate the increase in supply as early as 2022. On the demand side the low interest rates will continue to support the demand, but less compared to the last year and a half in light of the upward update of the purchase tax for investors.