Bennett promises solutions to wave of rising prices in Israel

“In the end what lowers prices and improves service is always the same - competition, competition, competition,” Prime Minister Naftali Bennett said.

 Prime Minister Naftali Bennett following an interview with The Jerusalem Post this week. (photo credit: OLIVIER FITOUSSI/FLASH90)
Prime Minister Naftali Bennett following an interview with The Jerusalem Post this week.
(photo credit: OLIVIER FITOUSSI/FLASH90)

In light of the recent wave of rising prices, Prime Minister Naftali Bennett on Sunday said he intends to roll out measures dedicated to tackling the increased cost of living.

“In the coming days, we will present to the public a series of measures designed to alleviate the cost of living in the country,” Bennett said. “I hope it will happen soon, especially food prices. Several containment measures have already been taken regarding marketing chains and importers, and I would like to commend the finance minister and the economy minister for that.”

Last week, Finance Minister Avigdor Liberman and Economy Minister Orna Barbivay sent a joint letter to leading food manufacturers, including Osem, Strauss and Sano, urging them not to raise their prices and threatening to take action if necessary to prevent inflation in the food industry.

They expressed their intention to “stop the rise in prices [in accordance with the] national responsibility expected from the companies in this challenging period, taking into account their economic situation and profits.”

As Israel enters the third year of the global COVID-19 pandemic, its consumer price index (CPI), which reflects the average cost of living in the nation, has risen significantly. The CPI increased 2.8% last year.

Illustrative photo of Israeli money (credit: MARC ISRAEL SELLEM)Illustrative photo of Israeli money (credit: MARC ISRAEL SELLEM)

The increase is significant on a national scale: Israel’s inflation rate, as measured by CPI, has tightly hugged 0% since 2014, and such a sudden rise has not been recorded since the 1980s. However, on a global scale, Israel pales in comparison to other nations in terms of recent inflation, including Germany (5.3%), the US (7%), Russia (8.3%) and Brazil (10%).

“Although, relatively, the global price increase is hitting Israel moderately compared to other countries, we feel it well because it sits upon very high prices in the first place,” Bennett said.

Even before the recent wave of price increases in Israel, prices have been higher than average. According to the OECD, Israel is tied with Iceland for second in the world in general price level, with Switzerland being the only country higher.

Bennett reiterated that the encouragement of competition is the key factor in lowering the cost of living.

“Ultimately, what lowers prices and improves service is always the same: competition, competition, competition,” he said.

“We need to see the situation as an opportunity... to address structural, long-term failures that have led to a decade of price increases,” Bennett said. “This government has an extraordinary opportunity to reduce the influence of lobbyists and stakeholders and to act for the benefit of the public for the benefit of all Israeli citizens.”