Israel's Consumer Price Index rises by 0.2%, lower than forecast

The Consumer Price Index (CPI) rose 0.2% in May, lower than the forecasted range of 0.5% to 0.6%, the Central Bureau of Statistics reported Thursday.

Despite lower-than-expected growth, the CPI has had a cumulative increase of 2.2% since the beginning of the year, and over the past 12 months, it rose 4.6%.

There were some notable price changes. Fresh fruit prices surged 11%, while vegetable prices declined 2.9%. Average rents increased 0.4% in May. Tenants who renewed rental contracts paid an average of 3.6% more, while rents for new tenants increased an average of 8.6%.

Culture and entertainment prices increased 1.1%, while housing prices rose 0.5%. On the other hand, the prices of furniture, household equipment, clothing and footwear, declined an average of 0.8% each.

The price index for residential construction declined 0.1% in May. Over the past year, the index rose 2.5%, primarily driven by a 4.2% surge in material and product prices and a 1.4% rise in labor wages. May saw a marginal 0.1% increase in the wage price index for those employed in the industry.

The CPI is subject to seasonal trends and fluctuations. Therefore, excluding seasonally adjusted housing and the index without vegetables and fruits, both decreased 0.1%.

As a consequence of these developments, the Water Authority has announced an upcoming increase in water rates starting on July 1. The rate will rise 3.08%, resulting in the lower rate being about NIS 7.897 per cubic meter (up from NIS 7.661 per cubic meter) and the higher rate being about NIS 14.494 per cubic meter (instead of NIS 14.061 per cubic meter) for any additional amount consumed.

This increase of 3.08% in water rates translates to an additional monthly cost of about NIS 5 for an average family of four, consuming approximately 16 cubic meters per month. As a result, the average monthly water and sewerage bill for such families will now be about NIS 140.