The Limited Times

Now you can see non-English news...

February Index: 0.7%. Expected: Will continue to rise in the coming months - Walla! Of money

2022-03-15T16:36:24.221Z


The February index rose by%, reflecting the inflationary wave in the world, as well as for the first time the effects of the Russian invasion of Ukraine that caused prices to rise, especially in the field of energy and goods


February Index: 0.7%.

Expected: It will continue to rise in the coming months

The February index rose by 0.7%, reflecting the global inflationary wave, as well as for the first time the effects of the Russian invasion of Ukraine that caused prices to rise, especially in the field of energy and agricultural commodities, although these will be more pronounced in March.

Aliyah stars in Israel: Fresh vegetable and fruit sections

Between Ashkenazi

15/03/2022

Tuesday, March 15, 2022, 6:30 p.m.

  • Share on Facebook

  • Share on WhatsApp

  • Share on Twitter

  • Share on Email

  • Share on general

  • Comments

    Comments

Governor of the Bank of Israel, Prof. Amir Yaron.

Concerns about inflation against the background of a surprising increase in state tax revenues (Photo: Government Press Office)

Estimated: The index will continue to rise at an increased rate in the coming months as well

Ofer Klein, head of the economics and research division at Harel Insurance and Finance

, explains that about half of the increase in the index is due to the rise in fuel and electricity prices.

In the coming months, according to Klein, even higher indices are expected.



"The continued rise in oil and food prices in the wake of the war in Europe will lead to even higher indices in the next two months. "The CBS 'consumer confidence has recorded a significant deterioration in households' expectations of the economic situation in the coming year."



Regarding the actions that the government and the Bank of Israel may take, Klein estimates that "the continued increase in tax revenues increases the chances of further fiscal measures by the government. State revenues continue to be surprisingly positive. High revenues of about NIS 34 billion were recorded in February. Income tax and real estate taxation were the main contributors to this, similar to previous months.



At the same time, in light of the continued decline in the aid program, expenditures continue to decline, so the deficit as a percentage of GDP fell to 2.2 percent (3.3 January) a level not seen since 2018 and well below the deficit target (3.9%).

A record surplus of about NIS 22 billion in the first two months of the year, along with the large amount of cash held by the government, will lead in our estimation to a reduction in government bond issues (even taking into account the increase in fundraising as a replacement). In the price index (also following the war in Ukraine).

More on Walla!

The 70th anniversary celebrations at Binyamina Winery: Which Israeli wines do you really prefer?

In collaboration with Binyamina Winery

Jerome Powell, Chairman of the Federal Reserve. Raising interest rates (Photo: Reuters)

Regarding the outlook for the coming months in the world, Klein believes that the opening shot in the context of the US anti-inflation policy will take place tomorrow evening, when the Fed will begin the process of raising interest rates



. Which is expected to raise interest rates by 0.25 percentage points.

The relatively low impact of the war in Europe and the sanctions on Russia in the US economy, excellent labor market data and the continued rise in inflation (7.9% in February) support the Bank raising interest rates consistently at every meeting by the end of the year. The degree of aggressiveness of the forward forecast. "



Regarding what is expected in Europe, Klein notes: "Europe is currently ignoring the war and focusing on inflation. On Thursday, we will see the Bank of England raising interest rates for the third time in a row.



The central bank in the eurozone has announced that it will reduce its purchase plan more quickly in light of the sharp rise in inflation expectations, and if its forecasts materialize, it will complete it in about six months.

But at the same time the governor stressed that the forward forecast is vague in the face of the war and the negative consequences for economic growth, so they do not commit and will decide on the basis of the actual data.



We believe that later this year we will begin to see in Europe the negative effects of sanctions on Russia.

This will make it difficult for the central bank to raise interest rates quickly, but high inflation (which will rise further in the coming months) means that there will be no support from the central bank other than a commitment to provide liquidity to the banking system in light of exposure to banks in Russia.

"This coming Thursday we will see the Bank of England raising interest rates for the third time in a row in the face of even higher inflation."

  • Of money

  • news

Tags

  • measure

  • Consumer price index

  • Bank of Israel

Source: walla

All business articles on 2022-03-15

You may like

Life/Entertain 2024-02-27T08:04:35.699Z
Life/Entertain 2024-02-27T08:04:43.722Z
Business 2024-02-24T05:02:38.895Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.