(Adds details, central bank chief comments)
By Steven Scheer
JERUSALEM, March 15 (Reuters) - Israel's inflation rate
eased to a four-month low of 5.2% in February from a 2008 high
of 5.4% in January, but it was higher than expected and will
likely mean another interest rate hike next month.
The consumer price index (CPI) rose 0.5% in February from
January, led by gains in fresh produce, housing rentals, food
and transportation costs.
Economists polled by Reuters had on average expected a 0.3%
monthly rise and a 5.0% annual rate.
February's inflation rate was the lowest since October.
The Bank of Israel is slated to decide on interest rates on
April 3.
The central bank has raised its benchmark rate sharply over
the last year to 4.25%, from 0.1% last April, amid what it calls
"sticky" inflation that has kept it above a government target of
1-3%.
In an interview with CNN late on Tuesday, Bank of Israel
Governor Amir Yaron indicated more tightening was likely as long
as inflation stayed high.
"So we are determined, absolutely determined to bring
inflation back down to its target," Yaron said. "And if that
means continuing raising rates, and that is our primary tool,
that's what we will do."
He said that "it will take a little bit more pain, probably,
in order to bring inflation back down to its target" and that he
was not in favour of stopping monetary tightening now.
"We know and there is experience in the past that if you
stop too early, inflation can come back with a vengeance," Yaron
said. "And therefore I predict that at least around the world,
we will see rates continue to go up and they will stay up for
quite a bit."
Along with high inflation, Israel's economy grew 6.4% in
2022 but is forecast to grow at around 3% in 2023.
(Reporting by Steven Scheer; Editing by Alex Richardson)
Messaging: steven.scheer.thomsonreuters.com@reuters.net;
Twitter: @StevenMScheer))
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