Record-breaking C.o.l. Hike in July

The cost-of-living index in Israel rose by 27.5 percent in July, breaking all previous monthly records, the Central Bureau of Statistics reported today, attributing the massive increase to price hikes stemming from decreases or cancellation of government subsidies, and currency devaluation.

The subsidy cuts and devaluation took place when the most recent stage of Israel’s austerity package was put into effect on July 1.

Treasury officials predicted that the cost-of-living indices would drop by between four and six percent in August and September, predictions slightly higher than earlier forecasts for those months of two to four percent increases, when, officials said, the effect of the government’s efforts to reduce inflation by austerity measures would become apparent.

The bureau said the large price increases stemmed from higher costs of all consumer items apart from those of fruits and vegetables, which experienced seasonal reductions. Food went up in July by 39 percent, household outlays by 34 percent, and transport and communications fees by about 36 percent.

Officials said that, during the past 12 months, the annual inflation rate has been 445 percent, with the inflation rate at an annual rate of 380 percent during the first six months of the year.

Israeli wage earners will receive a one-time compensation of only 12 percent this month, instead of the “normal” rate of 25 percent normally called for by the current inflation rate increase.

The Histadrut called for special help for the lower-paid workers. The opposition Mapam Party said that real wages were being eroded by 13 percent in August and by another 23 percent in September, claiming this was being caused by the lower rate of compensation to workers under the economic recovery plan.