Annual inflation in Israel retreated in August, new data shows

Israeli annual inflation in August retreated, moving within the government’s target range for the first time in more than a year, led by declines in the costs of fresh fruit, along with clothing and footwear, data released by the Central Bureau of Statistics show.

Annual inflation over the past 12 months decelerated to 2.9 percent, down from 3.1% in July, and 3.3% in June. For the first time since June 2024, the inflation rate moved within the government’s annual target range of between 1% to 3%.

On a monthly basis, the consumer price index (CPI), a measure of inflation that tracks the average cost of household goods, rose in August by 0.7%, at the higher end of analysts’ expectations of an increase of between 0.6% to 0.7%.

In August, declines were seen in the prices of fresh fruit, which declined 2.7%, clothing and footwear, which fell 1.6%, while home furniture prices slipped 0.5%.

These were offset by notable increases in the costs of culture and entertainment, which rose 2.9%, and transportation and communication, which was up 1.6%. The cost of fresh vegetables increased 1.5%, and expenses for foreign travel soared by 17.2%.

Rents on renewal of contracts rose 2.7% in August, and rents on contracts for new tenants jumped 5.5%.