Israel: Inflation recedes in August
September 15, 2022
Inflation dropped to 4.6% in August, below July’s 5.2% and undershooting market expectations. The reading was driven by moderating price pressures for transportation and communication, and education, culture and entertainment.
Annual average inflation rose to 3.5% in August (July: 3.3%). Meanwhile, core inflation was steady, coming in at July's 4.5% in August.
Finally, consumer prices fell 0.28% in August over the previous month, contrasting July's 1.13% rise. August's result marked the weakest reading since May 2020.
August’s inflation rate was still well above the Central Bank’s 1.0–3.0% target range. On top of higher international commodity prices, inflation in Israel is being driven by the marked depreciation of the shekel so far this year and a tight domestic labor market. That said, inflation remains mild relative to most other developed economies due to a limited reliance on energy imports.