The consumer price index dropped by 0.1% in February to 99.5 points, as expected. From January the CPI has dropped by 0.7%.

Chambers of Commerce president Danny Gillerman called the CPI's gradual decline the "coming attraction" of the recession to come.

He said the CPI is indicative of the present situation of the economy but does not yet express the full force of the negative effects the global stock exchange crises will have on Israel.

Gillerman said the Bank of Israel should wake up and significantly cut interest rates by at least 1% before it's too late.

The index was dragged down 0.2% by a 5.1% drop in clothing prices, and a 1.4% decline in fruit and vegetable prices. Housing prices went up by 0.6%, contributing a 0.1% loss to the general index.

The index of wholesale prices lost 0.1% in February and the index of raw materials for construction dropped by 0.3%.