The Expected Rate of Inflation and Changes in the(M1)Money Supply

16.8.2005
 
The Expected Rate of Inflation and Changes in the (M1) Money Supply
 
  Expected inflation rate (percent) M1 money supply
  Calculated from capital market Average of the professional forecasters' inflation forecastsc 12 months forward Average monthly balance (NIS billion) Rate of change (percent)
  for first year a For second yearb For third year and after Monthly Previous 12 monthsd
December 2001 0.6 1.3 2.5 1.6 29.2 4.1 15.4
December 2002 2.2 3.8 5.3 2.0 30.6 2.7 4.9
December 2003 0.7 1.7 3.2 1.6 33.6 1.7 7.7
2004
January 0.9 2.1 3.3 1.5 34.3 4.0 10.4
February 1.1 2.5 3.5 1.7 34.8 1.5 11.7
March 1.2 2.8 3.4 1.7 35.6 2.3 14.1
April 1.6 3.0 3.6 2.0 36.9 3.5 18.5
May 2.0 3.1 3.7 2.6 36.8 0.3- 16.9
June 1.8 2.6 3.7 2.3 36.9 0.5 21.0
July 1.5 2.2 3.8 2.0 38.0 2.8 22.2
August 1.9 2.6 3.9 2.4 38.5 1.5 20.5
September 2.0 2.3 3.7 2.5 39.6 2.7 22.8
October 2.0 2.5 3.6 2.4 39.2 1.0- 21.3
November 1.9 2.0 3.4 2.2 38.4 1.9- 18.5
December 1.4 1.9 3.5 2.0 38.9 1.3 18.0
2005
January 1.6 2.0 3.3 2.0 39.8 2.4 16.1
February 2.0 2.4 3.1 2.2 40.4 1.5 16.1
March 2.2 2.4 3.1 2.1 41.0 1.3 15.0
April 2.0 2.0 3.1 2.1 42.6 3.9 15.4
May 1.7 1.9 3.0 2.2 42.1 -1.1 14.5
June 1.9 2.2 2.9 1.9 43.1 2.4 16.7
Julye 2.1 2.3 2.9 2.3 44.8 3.8 18.0
Last 30 daysf 2.0 2.2 2.9 2.3      
 
a Expectations for the next twelve months. Since December 2004 expectations have been derived from real yields, calculated from the zero-coupon yield curve, and not as the simple mean of yields on bonds maturing in about a year, as was done in the past, and from the yield on 1-year Treasury bills. A more detailed explanation appears in Box 2 in the Inflation Report No. 16, for January–June 2005 (English version appearing shortly).
b Based on the return on Shahar bonds, or on Galil bonds for equivalent periods.
c Simple arithmetic mean of the inflation forecasts of the commercial banks and economic consultancy companies that publish their forecasts on a regular basis. The forecasts in the last row ("Last 30 days") are the averages of the latest forecasts received from all the professional forecasters.
d The percentage change in the level in the current month compared with the level in the equivalent month in the previous year.
e Money supply data are preliminary data.
f Average inflation expectations from the 16th of the previous month to the 15th of the current month.