Israel's CPI drops by 0.7% in January 2010

Inflation will probably slow to the mid-point of the government’s 1% to 3% target range in a year’s time
 
On 15 February, Israel's Central Bureau of Statistics (CBS) announced that the Consumer Prices Index (CPI) fell by 0.7% in January 2010, a drop much larger than the 0.3% forecast by the banks.
 
Inflation will probably slow to the mid-point of the government’s 1% to 3% target range in a year’s time, Bank of Israel Governor Stanley Fischer said on Feb. 8. Fischer held the benchmark interest rate at 1.25% last month after increasing it by a quarter-point in December.
 
One major influence on the January CPI was the 10% fall in clothing prices in January, which contributed a drop of 0.25% to the overall index. Despite the rise in water tariffs, water prices fell 10% in January because of the freezing of the droughttax. The price of fresh vegetables fell 6% and prices of overseas vacations were down 1.6%. In contrast, the price of fresh fruits rose by 3%, bus fares rose by 4.5% and the price of electricity rose by 1%.
 
January was the second successive month that the prices of apartments had fallen. Apartment prices fell 1% in January, after a 0.2% drop in December. The decline in apartment prices was responsible for 0.2% of thedrop in January's CPI.