Israel's Consumer Price Index Rises 0.7% in August, Driven by Produce and Transport

Israel's Consumer Price Index (CPI) saw a 0.7% increase in August, bringing the annual inflation rate to 1.5% over the past 12 months. The rise was primarily fueled by a 2.9% jump in fresh produce prices and a 2.7% increase in transportation costs. Other notable price hikes included a 2% rise in culture and entertainment and a 0.6% increase in housing.

Conversely, several categories experienced price decreases. Fresh fruit prices fell by 2%, clothing by 0.8%, and food by 0.5%. Furniture and home equipment prices also dipped by 0.3%. Rental prices showed an increase, with a 2.6% rise for lease renewals and a significant 4.4% increase for apartments with new tenants.

In the housing market, transaction prices for June-July 2026 rose 0.2% compared to the previous two-month period, and new apartment prices increased by 0.5%. However, on an annual basis, apartment prices in June-July decreased by 1.2% compared to the same period last year, with new apartments down 0.8%. Second-hand apartment prices fell by 1.2% in the second quarter of 2026 compared to the first quarter.

The construction input price index saw a 0.1% decrease in July, though it has risen 2.3% year-to-date and 3.5% over the last 12 months, largely due to a 5.4% increase in labor costs. The industrial output price index for domestic destinations increased by 2.7% in August, driven by a 28.3% surge in refined petroleum product prices and a 1.1% rise in furniture prices. Conversely, pharmaceutical and metal product prices fell by 1.1% each, and clothing prices dropped by 7.6%.