August CPI reading higher than expected

Inflation credit: Tali Bogdansky
Inflation credit: Tali Bogdansky

Annual inflation in Israel is back on the rise, while housing prices fell for the fourth consecutive month.

Israel’s Consumer Price Index (CPI) rose by 0.5% in August. In the twelve months to the end of August, the index rose by 4.1%. The figures released by the Central Bureau of Statistics came as an unpleasant surprise, as analysts had been predicting a 0.3%-0.4% rise in the CPI in August. The Bank of Israel's target range for annual inflation is 1-3%.

There were notable rises in transport, up 1.8% last month, in culture and entertainment, up 1.3%, and home maintenance, up 0.7%. Clothing and footwear fell by 2.5%.

The rise in rents for new tenants continues to be a concern. The home rental item excluding public housing rose by 1.8%, but for tenants renewing a lease the rise was 3.8%, and for new tenants the rise was 8.4%.

The Central Bureau of Statistics also released figures for home prices, which are not part of the CPI. A comparison of deal prices in June-July 2023 with deals in May-June 2023 shows a fall of 0.1%. Prices have now fallen for the past four consecutive months.

In comparison with June-July 2022, prices in June-July 2023 were 3.2% higher. In the breakdown by region, prices rose year-on-year by 6.6% in the north, 6.4% in Haifa, 3.7% in the south, 2.9% in Jerusalem, 2.2% in the central region, and 1.9% in Tel Aviv. The average price of new homes in Israel has risen 2.6% over the past year.

Published by Globes, Israel business news - - on September 15, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Inflation credit: Tali Bogdansky
Inflation credit: Tali Bogdansky
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