Israel's Inflation Slows Sharply in October, Defying Analyst Predictions
Translated & summarized from NEWSru Israel by baba
Israel's inflation rate unexpectedly fell by 0.1% in October 2026, defying analyst predictions of a rise and reaching a five-and-a-half-year low of 1.1% annually. The slowdown was driven by cheaper transportation and housing services, though clothing, footwear, and vegetables became more expensive. This brings inflation closer to the Bank of Israel's target range.
The story in 6 lines · by baba
- Israel's October 2026 inflation rate decreased by 0.1%, contrary to analyst expectations.
- Annual inflation dropped to 1.1%, the lowest level since April 2021.
- The decline brings inflation near the Bank of Israel's 1-3% target range.
- Transportation costs fell 1.4%, including a 5.1% drop in travel expenses.
- Clothing, footwear, and fresh vegetables saw significant price increases.
- Foreign travel and domestic flights are down 7.5% over the past year.
Israel's inflation rate experienced a significant slowdown in October 2026, with the consumer price index (CPI) actually decreasing by 0.1%, contrary to economists' forecasts of a 0.2% to 0.4% rise. This brought the annual inflation rate down from 1.6% in September to 1.1%, marking its lowest point in five and a half years, since April 2021. The current inflation level is now approaching the lower bound of the Bank of Israel's target range of 1% to 3%.
The decline is largely attributed to the exclusion of the October 2025 index from the annual calculation, which had previously shown a 0.5% increase. The monthly index was primarily pulled down by a 1.4% decrease in transportation costs, including a 5.1% drop in expenses for foreign travel and domestic flights. Housing services for apartment owners also saw a 0.5% reduction.
Conversely, clothing and footwear prices rose by 4.1%, and fresh vegetables increased by 3.5%. Household maintenance costs went up by 0.4%, and furniture and home goods became 0.3% more expensive. Over the past year, the most significant price decreases were observed in foreign travel and domestic flights (down 7.5%), clothing and footwear (down 4.7%), furniture and home goods (down 4.2%), and bread and bakery products (down 2.8%).
