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Towards a more expensive summer than usual: the forecasts - breaking records in the consumer price index Israel today

2022-06-09T01:05:21.391Z


The expenses that will be added in the hot season will not make it any easier for the Israeli consumer • Expect an 11-year high in the index • The main victims: minimum wages whose wages do not rise


The cost of living in Israel is rising, and this summer will probably be the most expensive of those we have experienced to date.

The price increases are well felt in all areas from the beginning of the year, from the monthly expenditure on groceries at the supermarket, through mortgage or rent payments to expenses on fuel.

But in the coming months, as every summer, more expenses will be added to all of these - for children's frameworks, vacations in Israel and abroad, attractions, restaurants, and so on. The nearest.

The wave of price increases in the country began at the end of 2021, with the crisis in the supply chains and the price increase of raw materials, and intensified at the outbreak of the Russia-Ukraine war.

According to the Bank of Israel, the main reasons for this are a high initial price level, a relatively slow rate of wage increase and stability in energy prices.

Damages of the war in Ukraine.

Also affected the prices of raw materials, Photo: Reuters

Price increases are also reflected in "dry" economic data.

This coming Wednesday, the Central Bureau of Statistics will publish the May Consumer Price Index.

According to analysts' forecasts, a further rise in the price index of 0.8% -0.7% is expected - which will lead the rise of the index, looking at the last 12 months, to a level between 4.3% and 4.4%, which will be a record of more than 11 years.

"Our forecast for the index is 0.7% - a relatively high figure for May, in which inflation is generally lower," says Alex Zabrzynski, chief economist at Meitav Dash Investment House, in an interview with Israel Today.

In protest of the cost of living: MK Abutbul of Shas waved a loaf of bread in the plenum // Photo: Knesset Channel

Zabrzynski believes that spending on fuel in May was not dramatic, because this month there was a reduction of half a shekel per liter of fuel, with a reduction in excise tax.

On the other hand, he estimates that the items that will become especially expensive in May are clothing and footwear, transportation, housing and food.

"Food prices are rising all over the world, and if local suppliers used to talk about freezing the raises until Passover, now they understand that there is not much choice because the prices of agricultural commodities and food in the world are rising sharply, and they too will have to rise in price. For the rise of the index. "

"Expenditure on fuel in May - not dramatic", Photo: Yehoshua Yosef

He said, "The big disappearance is the rent section. We see a lot of articles and data on fairly sharp increases in rents, but these figures are not always reflected equally in the index. However, it makes sense that rents will rise at a higher rate in the coming months due to rising house prices. "And the rise in mortgages. The rent section constitutes about a quarter of the consumer price index, so any small increase in it should boost the index."

The minimum wage did not rise

In view of the wave of price increases described, it was to be expected that wages would rise by the same rate to compensate for the increase in expenditure.

The average wage in the economy did rise, and according to the CBS stood at NIS 12,672 - an increase of about 12% compared to 2019, the period of the outbreak of the corona crisis, and of more than 5% since the beginning of the year.

Political struggles following the minimum wage, Photo: Oren Ben Hakon

However, close to a million employees in the economy earn the minimum wage, which still stands at only NIS 5,300 a month.

Despite the many political struggles these days around the issue, the minimum wage in the economy has not yet risen.

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Source: israelhayom

All news articles on 2022-06-09

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