While a potential slowdown in economic activity is expected, the notable wage increases and shekel devaluation are set to have serious repercussions on the Israeli inflation rate.
"Even tomatoes need a vacation...we are unable to add tomatoes to our food," read notices posted at two Burger King India outlets.
Higher nominal wages indicate continuing inflation within Israel, which could lead to further counter-inflationary action from the Bank of Israel.
According to the BoI’s latest report, judicial reform and inflation rate adjustments are the primary factors that can significantly impact Israel’s risk premium.
A stationary CPI may be a signal that the bank’s efforts to mitigate inflation are working — assuming the shekel and Israel’s political stability don’t crumble.
US consumer prices are expected on Wednesday to show headline inflation slowed to its lowest since early 2021 at 3.1%, down from 9.1% a year earlier.
Bank of Israel governor: "We are still in an environment of great uncertainty."
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