Expected Rate of Inflation Derived from the Capital Market, Forecasters' Inflation Expectations, and the M1 Money Supply

16.06.2010
 
Expected Rate of Inflation Derived from the Capital Market, Forecasters' Inflation Expectations, and the M1 Money Supply
 
 
  Expected inflation rate (percent) M1 money supply
Calculated from capital marketa Average inflation forecastsb 12 months forward Average monthly balance (NIS billion) Rate of change (percent)
For first year For second year For third year and after Monthly Previous 12 monthsc
Annual data: d              
2002 2.2 3.8 5.4 2.6 30.6 2.7 4.9
2003 0.7 2.6 2.8 2.0 33.0 1.7 7.7
2004 1.4 1.9 3.5 2.1 38.9 1.3 18.0
2005 1.7 2.1 2.6 2.1 48.2 3.0 23.8
2006 1.2 1.6 2.1 1.9 52.1 4.6 8.3
2007 1.4 1.9 2.3 2.0 61.2 2.0 17.4
2008 1.9 2.2 2.7 2.5 71.9 3.9 17.4
2009 1.8 2.6 2.5 1.8 109.5 -0.5 52.3
               
Monthly data: e              
2009              
January 0.6 1.2 2.4 0.3 74.5 3.6 23.4
February 0.8 1.8 2.3 0.5 80.3 7.8 32.8
March 0.7 1.7 2.3 0.6 86.3 7.5 40.9
April 0.8 1.9 2.5 1.1 95.2 10.3 49.1
May 2.1 3.0 2.4 1.8 97.9 2.9 54.7
June 2.4 3.1 2.5 2.4 100.2 2.3 56.3
July 2.4 3.3 2.5 2.6 103.8 3.6 56.0
August 2.4 3.4 2.6 2.5 110.5 6.5 64.5
September 2.3 3.0 2.5 2.3 110.5 0.0 61.7
October 2.2 2.9 2.7 2.4 108.6 -1.7 54.2
November 2.5 3.1 2.6 2.6 110.0 1.3 59.0
December 2.5 3.2 2.6 2.7 109.5 -0.5 52.3
2010              
January 2.7 3.0 2.5 2.5 107.4 -1.9 44.2
February 2.8 2.5 2.5 2.1 105.5 -1.8 31.3
March 3.0 2.8 2.5 2.4 107.8 2.2 24.9
Aprilf 2.7 2.4 2.6 2.6 110.1 2.2 15.7
Mayf 2.7 2.6 2.8 2.7 109.9 -0.2 12.2
Last 30 daysg 2.8 2.6 2.8 2.7      
 
a Inflation expectations are defined as the rate of inflation that would make the yields on indexed and unindexed government bonds equal (break-even inflation); they include an inflation-risk premium. An explanation for how the expectations are calculated is available at the following address: http://bankisrael.gov.il/deptdata/monetar/m1_exp_e.pdf
b Simple arithmetic mean of the inflation forecasts of the commercial banks and economic consultancy companies that publish their forecasts on a regular basis.
c The percentage change in the level in the current month compared with the level in the equivalent month in the previous year.
d Annual data: expected inflation rate––annual averages; M1 money supply––December averages.
e Monthly data: monthly averages
f Money supply data are preliminary data.
g Average for the index month (from 16th of previous month to 15th of current month).