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Inflation pressures cool in August but housing prices soar further

Consumer price index dipped 0.3% last month, bringing annual inflation rate down to 4.6%; cost of homes up a whopping 17.9% from previous year

Israeli shekels, Jerusalem. (Orel Cohen/ Flash90)
Israeli shekels, Jerusalem. (Orel Cohen/ Flash90)

Inflation in Israel is showing signs of easing after months of rising costs, but residential housing prices continue to soar according to figures released on Thursday.

The Central Bureau of Statistics reported a 0.3 percent dip in Israel’s Consumer Price Index (CPI) last month, bringing down the yearly inflation rate to 4.6%. Since the start of 2022, the CPI has risen by 4.1%.

The index is a measure of inflation that tracks the average cost of household goods like food, clothing and transportation. It excludes housing prices, which are tracked separately.

The cooling inflation numbers from August came after the annual rate accelerated past 5% when monthly prices shot up in July at the fastest pace in over a decade.

Prices fell across all major categories tracked by the Central Bureau of Statistics in August except for residential housing. Prices of clothing and footwear dropped by 1.6% while costs of communication and transport items decreased by 3.5%.

Outlays on culture and entertainment rose by 0.9%, while apartment maintenance prices rose by 2.2%.

Illustrative: Construction in Rishon Lezion on August 8, 2022. (Yossi Aloni/Flash90)

A 1.3% jump in the price of apartments across the country was measured between May and July — amounting to a leap of 17.9% over the past year. Only Tel Aviv experienced a slight decrease in housing prices, by 0.1%.

Rental costs have also continued their rise. The average price of new contracts rose by 5.8% last month, while the average cost of renewed leases rose by 3.7%.

Israel’s inflation rate is relatively low in comparison to the OECD, which stood at 10.2% in July, a 0.1% drop since June, according to the latest figures. The measurement marked the first drop in the average inflation rate among the club of developed nations since November 2020.

 

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