Israel Inflation August 2023

Israel: Inflation increases in August

Inflation increased to 4.1% in August (July: 3.3%), above market expectations and moving further above the Central Bank’s 1.0–3.0% target range. Looking at the details of the release, the change in prices for food rose at a more moderate rate in August, while prices for transportation and communication and education, culture and entertainment grew at a quicker rate.

Annual average inflation fell to 4.7% in August (July: 4.8%). Meanwhile, core inflation ticked up to 4.0% in August, from the previous month’s 3.8%. Finally, consumer prices increased 0.48% in August over the previous month, accelerating from July’s 0.29% increase. August’s result marked the highest reading since April.

Currency weakness—the shekel has lost around 7% of its value against the USD so far this year—solid domestic demand and the recent uptick in energy prices are all contributing to keeping inflation fairly elevated. As such, a further interest rate hike by the Central Bank is still on the cards at the Bank’s next meeting on 23 October.

On the monetary policy implications, Goldman Sachs’ analysts said:

“The BoI flagged in the last MPC meeting that they expected the August CPI release to show an increase in inflation, and we do not think that this release alone would tilt the central bank to put rate hikes back on the table. Nevertheless, we think that given the ongoing depreciation pressures on the Shekel, the central bank is likely to keep its hawkish guidance going forward.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest