Press Release - 16.3.2010 - Expected Rate of Inflation Derived from the Capital Market, Forecasters' Inflation Expectations, and the M1 Money Supply

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Office of the Spokesperson and Economic Information

16.03.2010

Expected Rate of Inflation Derived from the Capital Market, Forecasters' Inflation Expectations, and the M1 Money Supply

For an explanation of how the expectations are calculated - Click here

	Calculated from capital market^a			Average inflation forecasts^b12 months forward	Average monthly balance (NIS billion)	Rate of change (percent)
	Expected inflation rate (percent)				M1 money supply
	For first year	For second year	For third year and after	Average inflation forecasts^b12 months forward	Average monthly balance (NIS billion)	Monthly	Previous 12 months^c
Annual data: d
2002	2.2	3.8	5.4	2.6	30.6	2.7	4.9
2003	0.7	2.6	2.8	2.0	33.0	1.7	7.7
2004	1.4	1.9	3.5	2.1	38.9	1.3	18.0
2005	1.7	2.1	2.6	2.1	48.2	3.0	23.8
2006	1.2	1.6	2.1	1.9	52.1	4.6	8.3
2007	1.4	1.9	2.3	2.0	61.2	2.0	17.4
2008	1.9	2.2	2.7	2.5	71.9	3.9	17.4
2009	1.8	2.6	2.5	1.8	109.5	-0.5	52.3

Monthly data: e
2009
January	0.6	1.2	2.4	0.3	74.5	3.6	23.4
February	0.8	1.8	2.3	0.5	80.3	7.8	32.8
March	0.7	1.7	2.3	0.6	86.3	7.5	40.9
April	0.8	1.9	2.5	1.1	95.2	10.3	49.1
May	2.1	3.0	2.4	1.8	97.9	2.9	54.7
June	2.4	3.1	2.5	2.4	100.2	2.3	56.3
July	2.4	3.3	2.5	2.6	103.8	3.6	56.0
August	2.4	3.4	2.6	2.5	110.5	6.5	64.5
September	2.3	3.0	2.5	2.3	110.5	0.0	61.7
October	2.2	2.9	2.7	2.4	108.6	-1.7	54.2
November	2.5	3.1	2.6	2.6	110.0	1.3	59.0
December	2.5	3.2	2.6	2.7	109.5	-0.5	52.3
2010
Januaryf	2.7	3.0	2.5	2.5	107.4	-1.9	44.2
Februaryf	2.7	2.7	2.5	2.1	105.7	-1.6	31.6
Last 30 days^g	2.7	2.9	2.5	2.2

a	Inflation expectations are defined as the rate of inflation that would make the yields on indexed and unindexed government bonds equal (break-even inflation); they include an inflation-risk premium. An explanation for how the expectations are calculated is available at the following address: http://bankisrael.gov.il/deptdata/monetar/m1_exp_e.pdf
b	Simple arithmetic mean of the inflation forecasts of the commercial banks and economic consultancy companies that publish their forecasts on a regular basis.
c	The percentage change in the level in the current month compared with the level in the equivalent month in the previous year.
d	Annual data: expected inflation rate––annual averages; M1 money supply––December averages.
e	Monthly data: monthly averages
f	Money supply data are preliminary data.
g	Average for the index month (from 16^thof previous month to 15^thof current month).

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