JERUSALEM (Reuters) – Israel’s main government data supplier said on Monday it was adjusting its inflation basket by boosting the weighting of housing, telecommunications and transportation, while lowering the weighting for food.
Starting with the January consumer price index, which will be issued on Friday, housing rental costs will comprise 26.8% of the CPI, up from 26.0% previously, the Central Bureau of Statistics said.
Transportation and telecoms will rise to 18.6% from 17.5%, while food, including fruit and vegetables, will dip to 17.9% from 18.3%.
Households on average spent about 20,000 shekels ($5,610.10) a month last year, the bureau said.
Israel’s inflation rate was 3.2% in 2024, above the government’s annual 1%-3% target. The CPI is expected to rise in coming months before easing in the second half of 2025, which could enable the Bank of Israel to lower short-term interest rates.
Policymakers have said the bank could reduce rates one or two times later this year from a current rate of 4.5% should inflation pressures fall. The bank projects a 2.6% inflation rate in 2025.
The Bank of Israel’s next policy meeting is Feb. 24. After lowering its key rate in January 2024, it has stayed on hold since due to sticky inflation largely stemming from war-related supply constraints.
($1 = 3.5650 shekels)
(Reporting by Steven Scheer; Editing by Bernadette Baum and Hugh Lawson)
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