Israel inflation rate rises 0.7 percent in April, eases from March

JERUSALEM, May 15 (Reuters) - Israel's annual inflation rate rose at a slower than expected pace in April, its fourth straight gain after 28 months of falling prices. The consumer price index rose 0.7 percent from a year earlier versus a 0.9 percent increase in March. Prices fell in September 2014 and kept doing so through last year. On a month-on-month basis, the consumer price index was up 0.2 percent in April, the Central Bureau of Statistics said on Monday. Prices of clothing and footwear, entertainment, telecoms and transport, food and fruits and vegetables rose last month, while costs of healthcare, housing rentals and furniture costs fell, the bureau said. Expectations that inflation will stay below the government's 1-3 percent target in the near term drove the Bank of Israel to cut benchmark interest rates in early 2015 to 0.1 percent from 0.25 percent. The bank, which has held the rate steady since, projects an inflation rate of 0.8 percent in 2017. The next rate decision is scheduled for May 29.

Apr 2017 Mar 2017 Apr 2016 Month-on-Month change (pct) +0.2 +0.3 +0.4 Year-on-year change (pct) +0.7 +0.9 -0.9 Index (base 100=Jan 2016)* 100.3 100.1 98.5

The CPI's weightings were changed beginning with the January 2017 index

- The April figures were below a consensus forecast in a Reuters poll that expected a 0.4 percent rise month over month and a 0.8 percent rise year over year. - The producer price index declined 0.5 percent in April. It has gained 2.1 percent over the past 12 months.

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(Reporting by Steven Scheer; Editing by Tova Cohen)