Israel Inflation May 2023

Israel: Inflation declines to lowest level since September 2022 in May

Inflation came in at 4.6% in May, down from April’s 5.0%. May’s reading represented the lowest inflation rate since September 2022 but was still well above the Central Bank’s 1.0–3.0% target range. The reading was primarily due to slower growth in prices for food. In addition, price pressures for transportation and communication grew at a softer pace, while clothing prices fell at a sharper rate.

The trend pointed up mildly, with annual average inflation coming in at 5.0% in May (April: 4.9%). Meanwhile, core inflation fell to 4.7% in May, from the previous month’s 5.1%.

Finally, consumer prices rose 0.19% from the previous month in May, moderating from the 0.78% increase recorded in April and undershooting market expectations. May’s result marked the weakest reading since November 2022.

May’s inflation data, together with the Fed’s decision to pause its hiking cycle and the appreciation in the shekel so far in June, reduce the chance of further monetary tightening by the Bank of Israel at the Bank’s July meeting.

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