Thursday, Apr 18, 2013
By Sara Toth Stub
Special to DOW JONES NEWSWIRES
JERUSALEM--Israel's inflation rate is expected to slow over the coming 12 months, according to the central bank's market-derived forecast published Thursday.
The consumer price index is expected to increase 2.5% over the next 12 months, according to the forecast, down from last month's forecast of 2.8%.
The bank's market-based forecast is derived from the values of CPI-indexed bonds.
A poll taken by the bank of financial institutions, which take more factors into account in their forecasting, expects the CPI to increase 1.8% over the next 12 months, down from 1.9% that was expected a month ago.
Actual annual inflation in March, the most recent month for which figures are available, was 1.3%, down from 1.5% in February.
After cutting the key interest rate by 75 basis points in the second half of 2012, the bank recently said it does not foresee another rate cut before the end of 2013 unless unforeseen geopolitical events or other situations arise.
The bank has said it would like to avoid another rate cut in order to prevent a further rise in housing prices, which it has warned could lead to a bubble in that sector. The rate is currently 1.75%. The bank aims to keep annual inflation at between 1% and 3%.
Write to Sara Toth Stub at realtimedesklondon@dowjones.com
(END) Dow Jones Newswires
18-04-13 0910GMT
