: October 2023 Consumer Prices Defy Expectations Amidst "Iron Swords" War

The Consumer Price Index (CPI) for October 2023 surprised analysts by increasing 0.5%, surpassing the anticipated 0.4% rise. The data, released by the Central Bureau of Statistics (CBS) today, reflects the first month of the "Iron Swords" war, defying predictions of a decrease in prices due to reduced consumption during wartime.

Over the last twelve months, the CPI has surged by 3.7%, a slight dip from the 3.8% recorded in the previous month. The CBS attributes the unexpected rise to challenges in data collection and determining actual consumption post-war, acknowledging the impact on the surveyors collecting prices.

The Bank of Israel is expected to announce a quarter-percent drop in the interest rate to 4.5%, marking the first decrease since April 2020 during the early days of the COVID-19 pandemic.

In the realm of residential construction, the input price index saw a 0.2% uptick in October 2023, reaching 129.7 points. Notably, the prices of materials and products, including air conditioning (4.5%) and elevators (3.1%), experienced increases, while cement (2.3%) and imported concrete (1.2%) prices decreased.

The industrial output price index for local destinations rose by 1.7%, with refined petroleum products (5.9%) and computer-related equipment (3.9%) contributing significantly to the increase. Over the last twelve months, the industrial output price index surged by 3.9%.

Amidst economic shifts, apartment prices have seen a historic downturn, marking the first annual decrease (0.2%) since 2018. Recent months witnessed a gradual slowdown in the annual increase, which previously peaked at around 20%. Transactions with government support increased from 33.2% to 34.5%, while the price index for new apartments, excluding government-supported transactions, decreased by 0.6%. On an annual basis, new apartment prices have dropped by 3.9%.