The interest rate is expected to remain unchanged.
Capital market analysts expect the Consumer Price Index (CPI) to show a fall of 0.3-0.5% for February 2010. As in the two preceding months, the CPI is expected to be affected in February by the housing item, which has a weight of 21% of the index as a whole.
This time too, the size of the fall in the housing item, including housing services, will determine the drop in the CPI in February, although the drop is expected to be less than in December and January. Inflation in February will also be affected by the 10% drop in electricity tariffs, which came into effect in the middle of the month, and which will contribute 0.3% to the overall drop in the index.
Inflation is expected to be negative until mid-2010, suggesting that Governor of the Bank of Israel Prof. Stanley Fischer will refrain from interest rate hikes, thereby supporting economic growth.
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2010
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