Israel's Consumer Price Index Rises 0.3% in July with Annual Inflation at 1.5%

Israel's Consumer Price Index (CPI) increased by 0.3% in July 2026 compared to June, aligning with prior expectations. The annual inflation rate, measuring price changes over the past 12 months, stands at 1.5%, which is within the Bank of Israel's target range of 1% to 3%, but near the lower boundary, intensifying calls for an interest rate cut.

Notable price declines were recorded in clothing and footwear, which fell by 4.6%, fresh fruits and vegetables down 3.5%, home furniture and equipment down 0.7%, and miscellaneous items down 0.4%. Conversely, prices rose significantly in transportation by 1.4%, culture and entertainment by 1.1%, and housing by 0.7%. Rent increases were particularly marked, with renewing tenants facing a 2.6% rise and new tenants experiencing a 4.7% increase.

Regarding housing prices, comparing transactions from May-June 2026 to April-May 2026 shows a slight overall increase of 0.1%, with new home prices rising by 0.5%. Regional price changes included Jerusalem up 1.8%, Haifa 1.5%, the North 0.9%, the South 0.7%, while the Center and Tel Aviv saw decreases of 1.0% and 0.7%, respectively. On an annual basis, housing prices fell by 1.5%, and new home prices dropped 2.0%. Regionally, the Center experienced the largest annual decline at 4.1%, followed by Haifa, Tel Aviv, Jerusalem, the North, and the South with minor decreases or near stability.

These figures reflect a mixed economic environment with moderate inflation and varying regional housing market trends, influencing monetary policy considerations in Israel.