The Central Bureau of Statistics (CBS) reported that Consumer Price Index (CPI) for September decreased by 0.3%, mainly due to the global food and energy prices fall, as well as domestic growth slowdown.
August's CPI fell by 0.1%. Price declines were recorded in particular the following: fresh fruit -10.9%, food -1.0%, culture and entertainment -1.3%, clothing and footwear -5.0% and transport -0.3%.
Price increases were recorded in the following: fresh vegetables +1.6% and educational services +1.2%. Housing prices rose 0.7% in September and 10.4% in the twelve months to the end of September.
The last twelve months (September 2014 compared to September of 2013), the general index fell by 0.3%, the CPI excluding housing fell by 1.2%, while the CPI excluding fruit and vegetables fell by 0.4% and the CPI excluding energy fell by 0.1%.
Analysts noted that the September inflation figures mean that the Bank of Israel is unlikely to raise its benchmark interest rate for November.
The price rises seen earlier in the year were in large part due to government action, such as the rise in the rate of VAT and the special water levy, but their inflationary effect is now over.
Analysts also expect the Bank of Israel will further cut interest rates by 10 or 15 basis points. Since 2011 the central bank has cut its benchmark interest rate 12 times, and buy foreign currency to hold down the country's currency exchange rate and help exports, in August this year, the bank's foreign currency reserves reached a record US$ 88 billion.
