Israel's Consumer Price Index Rises 0.3% in July; 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 the change over the last 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. This low inflation rate is intensifying calls for an interest rate cut.

Significant price decreases were recorded in clothing and footwear, which fell by 4.6%, and fresh fruits and vegetables, which dropped by 3.5%. Other categories with price declines include furniture and home equipment (-0.7%) and miscellaneous items (-0.4%). Conversely, prices rose notably in transportation (up 1.4%), culture and entertainment (up 1.1%), and housing (up 0.7%). Rent increases were also observed: renewing tenants faced a 2.6% rise, while new tenants saw 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 for this period include Jerusalem (+1.8%), Haifa (+1.5%), and the North (+0.9%), while the Central and Tel Aviv districts saw declines of 1.0% and 0.7%, respectively. On an annual basis, housing prices fell by 1.5%, and new home prices decreased by 2.0%. Yearly regional declines were most pronounced in the Central district (-4.1%), followed by Haifa (-1.8%) and Tel Aviv (-1.7%).