Inflation is running rampant, and we the consumers are paying the price.
The price index for the month of July which was published yesterday rose by 1.1%, much higher than the economists' early predictions of 0.7%, and succeeded in surprising many.
Regarding the forecast for the near future, Chen Herzog, the chief economist of the consulting firm BDO, told "Israel Today" that "We are in an environment of continued high inflation which is largely due to a global trend, for example due to the rise in commodity prices, due to the impact of the war in Ukraine and Russia, i.e. These are international factors that are not under the control of the Bank of Israel.
"The index for July published on Monday indicates a high rate of inflation. Some of this has a seasonal effect of the beginning of summer, such as tourist vacation prices. In addition, there are areas that became more expensive at the beginning of July that were not reflected in this index. On the other hand, since August 1 Gasoline prices fell, and fuel prices were not reflected in the latest index. It should be remembered that the last index was an upward anomaly. Some prices, such as that of fuel, have fallen since then, but on the other hand, there is the increase in electricity prices, which has not yet been reflected in this index."
Herzog adds and says that "in a broad view, we understand that on the one hand, there is a trend of moderation in commodity prices in the last month. Oil prices in the world have fallen, as well as the prices of wheat and other commodities. Therefore, there are the first signs in the world of a moderation in the rate of price increase. Also, there is a decrease in the exchange rate The dollar, which somewhat lowers import costs.
"On the other hand, with us just last week the price of electricity rose by almost 9%. This price increase is not yet reflected in the indices, and it has cross-cutting effects. When electricity prices rise, it also spills over into production, trade and inputs, so there is a rolling effect. That's why I think that in vision Go ahead, the price increase trend is not behind us yet, although there are encouraging signs in global trends."
Herzog estimates that the August index which will be published in September is expected to be relatively low, with an increase of about 0.1%.
According to him, "the test is the next indicators for the holiday period".
400 shekels more
Regarding the consequences for consumers, Herzog said that "what consumers will feel is the increase in electricity prices. In August, it is the peak of electricity consumption because of the air conditioners, and they will see high bills because of the increased electricity bill. The price increase in August caused an average increase of NIS 400 per year. Another increase in the price of electricity is expected , since the state did not raise the full amount."
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