Posted on 04/15/23
| News Source: i24
Inflationary pressures persist, with consumer prices rising by 0.4 percent in March compared to the previous month
Real estate prices in Israel experienced a decrease of 0.2 percent in January-February 2023 compared to the previous month, according to figures released on Friday by the Central Bureau of Statistics (CBS).
This is the first decline since April-May 2020, when the coronavirus pandemic began to impact the economy. New home prices also registered a decrease of 0.3 percent.
This decrease comes after several months during which the price increase slowed down due to interest rate increases by the Bank of Israel, in a context of rampant inflation inside the country and abroad.
In December, the statistics office announced that housing prices were 20% higher in September-October 2022 compared to the previous year, but this figure has now fallen to 12.7 percent for the period of January-February 2023 compared to the same period in 2022.
The rise in interest rates has led to a sharp decline in home sales, with mortgage lending falling by more than half in a year. Recently, the bank raised its benchmark rate to 4.5 percent and warned that the government's judicial reform could harm economic growth.
The Central Bureau of Statistics also published figures showing that inflationary pressures persist, with consumer prices rising by 0.4 percent in March compared to the previous month. The consumer price index, which measures inflation, rose 1.1 percent last year. Since September 2022, prices have continued to increase from 0.1 percent to 0.6 percent month-on-month.
The largest price increases were observed in the clothing, footwear, poultry and vacation rental sectors, while consumers spent less on fresh produce, disposable goods, fuel and used cars.
Despite these challenges, the Bank of Israel remains optimistic about the possibility of a rapid recovery of the economy if internal tensions are resolved.
The forecasts indicate a reduction in inflation to 3.9 percent by the end of the year, against the 3 percent forecast in January, with a decrease to 2.3 percent in 2024.