Kan NewsEconomy18:29

Israel's Inflation Holds Steady at 1.5% Despite Expectations

By ליאל קייזר

Translated & summarized from Kan News by baba

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Israel's annual inflation remained at 1.5% in August, defying expectations of an increase, according to the Central Bureau of Statistics. The Bank of Israel recently cut its interest rate for the third time to 3.25% due to moderating inflation and economic activity.

The story in 5 lines · by baba

Israel's annual inflation held steady at 1.5% in August.
Consumer prices rose 0.7% in August, driven by vegetables and transportation.
Apartment prices saw a modest 0.2% increase between June and July.
Bank of Israel cut interest rates for the third consecutive time.
Rent prices increased significantly for both renewing and new tenants.

Israel's Consumer Price Index (CPI) rose by 0.7% in August compared to July, keeping the annual inflation rate steady at 1.5%, contrary to expectations of a significant jump. This data comes from the Central Bureau of Statistics (CBS) released Tuesday.

Notable price increases in August were seen in fresh vegetables (up 2.9%), transportation (up 2.7%), culture and entertainment (up 2.0%), and housing (up 0.6%). Conversely, prices dropped for fresh fruits (down 2.0%), clothing (down 0.8%), food (down 0.5%), and furniture and home equipment (down 0.3%).

Rent prices for contract renewals increased by 2.6%, while new renters saw a larger increase of 4.4%. In the housing market, apartment prices rose by 0.2% between June-July compared to May-June, according to a separate CBS index. Price increases varied by district, with Tel Aviv seeing a 0.7% rise and the Center 0.3%, while prices fell in the North (0.1%), Haifa (0.3%), and Jerusalem (0.4%). Compared to the same period last year, apartment prices decreased by 1.2% in most districts.

The steady inflation follows a gradual moderation in recent months. This trend prompted the Bank of Israel to cut its interest rate by 0.25% earlier in the month, marking the third consecutive reduction, bringing the rate to 3.25%. Bank of Israel Governor Prof. Amir Yaron commented that inflation is below the target, economic activity is more moderate, and third-quarter indicators suggest a slowdown in demand. He also noted that the strong shekel's impact on inflation is not yet fully reflected and that the bank operates amidst significant uncertainty.

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