By Steven Scheer
JERUSALEM (Reuters) – Israel’s inflation rate fell to 3.5% in September, down from 3.6% in August, according to the Central Bureau of Statistics. This drop is the first in seven months but is still above the government’s target of 1%-3%.
Officials attribute rising inflation, which spiked from 2.5% in February, to supply issues related to the ongoing war. The consumer price index dropped 0.2% in September, driven by lower costs in transport, entertainment, clothing, and fresh fruit.
In the second quarter, the economy grew only 0.3%, down from an estimated 0.7%, with a per capita contraction of 0.8%. The Bank of Israel has kept interest rates steady since January due to geopolitical tensions and economic pressures, with the next rate decision set for November 25.
Despite the drop in inflation, analysts believe it won’t lead to rate cuts soon. “Today’s inflation figure isn’t enough to justify an interest rate hike in November,” noted Yonie Fanning, chief strategist at Mizrahi Tefahot.
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