The cost-of-living index rose by 1.2 percent in June, the highest June increase in two years.
The figures were announced Friday by the Central Bureau of Statistics, which said the index has risen by 12 percent during the first half of 1989.
That means that if prices continue to rise by the same rate for the rest of the year, inflation could approach 25 percent, dramatically higher than the single-digit figure predicted at the beginning of the year by Finance Minister Shimon Peres.
But Peres said Friday that the price rises should not be seen as inflationary but rather the result of an overdue devaluation of the Israeli shekel.
Using 1987 as a baseline of 100, the price index now stands at 139.
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