Israel Inflation Slows Further

Israel’s annual inflation rate stood at 1.5% in August 2026, unchanged from the previous month and slightly below the expected 1.6%. Inflation remains comfortably within the central bank’s 1%-3% target range, with the reading at its lowest level since May 2021. Price growth rebounded for transport (0.6% vs -0.4%), while deflation eased for furnishings (-3.9% vs -4.1%) and clothing and footwear (-5.2% vs -6.3%). Meanwhile, price pressures eased for food, including vegetables (1% vs 1.4%), housing (3.8% vs 3.9%), dwelling maintenance (1.4% vs 1.6%), health (1.5% vs 1.6%), and education, culture and entertainment (0.8% vs 1.3%). On a monthly basis, consumer prices rose 0.7%, accelerating from a 0.3% increase in the previous month.

Israel’s annual inflation rate eased to 1.5% in July 2026, down from 1.6% in June and below market expectations of an unchanged reading, remaining comfortably within the central bank’s 1%-3% target range. The latest reading marked the lowest inflation rate since May 2021, as price pressures moderated across several categories. Inflation slowed for food, including vegetables (1.4% vs 1.6%), housing (3.9% vs 4.2%), dwelling maintenance (1.6% vs 1.8%), health (1.6% vs 1.8%), and education, culture and entertainment (1.3% vs 1.4%). Meanwhile, deflation deepened for transport (-0.4% vs -0.3%), furnishings (-4.1% vs -3.7%), and clothing and footwear (-6.3% vs -5.9%). On a monthly basis, consumer prices rose 0.3%, following a flat reading in June.

Israel's annual inflation rate eased to 1.6% in June 2026, the lowest since May 2021, down from 1.9% in May and in line with the central bank's 1%-3% target. Price pressures softened for food, including vegetables (1.6% vs. 2.6%), and education, culture, and entertainment (1.4% vs. 1.5%), while transportation and communication prices fell 0.3%, reversing a 0.8% increase in the previous month. Deflation deepened slightly for furnishings and household equipment (-3.7% vs. -3.6%), while inflation for dwelling maintenance was unchanged at 1.8%. In contrast, housing inflation accelerated to 4.2% from 4%, and health costs rose 1.8% after a 1.6% increase. Meanwhile, deflation for clothing and footwear eased to 5.9% from 6.7%. On a monthly basis, consumer prices were unchanged in June, following a 0.3% decline in May.