Israel: Inflation remains limp in August, raising prospect of monetary easing
Consumer prices rose 0.2% in August over the prior month, contrasting July’s 0.3% fall. August’s reading was driven by higher prices for fresh fruit and vegetables, and culture and entertainment.
Inflation ticked up marginally to 0.6% in August from 0.5% in July, but remained well below the Bank of Israel’s 1.0%-3.0% target range. Core inflation, which excludes volatile energy prices, increased from 0.7% to 0.8%. Recent low inflation is likely being driven in part by the stronger shekel and low oil prices, and could add to calls for monetary easing, which was already hinted at in the Central Bank’s August meeting.