CBS: CPI up 0.3% in February

Inflation for the past 12 months is 4.2%, the annual government target of 1-3% price stability target. Inflation is expected to stay above 3% for most or all of 2011
 
Inflation continued to heat up in Israel, as the February Consumer Price Index blew past analyst expectations. The Central Bureau of Statistics (CBS) reported last week that the Consumer Price Index (CPI) rose 0.3% in February 2011, compared with analysts' expectations of a rise of only 0.1%.
 
Israel's inflation rate in Februaryhad moved above the annual government target of 1-3% price stability target, for the first time since last March to cause concern among policymakers. Inflation is expected to stay above 3% for most or all of 2011.
 
The exceptionally high rise in the CPI in February can be attributed to a 0.4% rise in the housing component (services to homeowners) as well as a sharp 5.7% rise in the price of fresh fruit and vegetables and a 1.2% rise in food overall. Telecom prices also rose 1%.
 
The pace of inflation will require an additional rise in the interest rate, if not at the end of this month, then at the end of April.
 
Inflation was offset in February by a 6.3% fall in the price of clothing, a 3.4% fall in the price of vegetables and a 0.8% fall in insurance rates.