Israel inflation slowed to 1.8% in January, below expectations

Israel’s annual inflation in January retreats slightly more than expected, led by declines in the costs of foreign travel, clothing and footwear, and entertainment, according to data released by the Central Bureau of Statistics.

Annual inflation over the past 12 months decelerated to 1.8%, from 2.6% in December, and is at the lowest level since June 2021. The inflation rate is well within the government’s annual target range of between 1% and 3%.

On a monthly basis, the consumer price index (CPI), a measure of inflation that tracks the average cost of household goods, fell in January by 0.3%, compared to analysts’ expectations for a decline of 0.2%. The monthly CPI was little changed in December from November.

In January, reductions were seen in the prices of clothing and footwear, which fell 3.9%. Transportation retreated 2.8% and entertainment and culture 0.7%. Expenses for travel abroad and in Israel dropped by 8.1%, and the costs of accommodation and travel in Israel were down 6.9%.

These were offset by increases in the costs of fresh fruit and vegetables which rose by 0.8%, health expenses which went up by 0.7%, and home maintenance, up 0.6%.

Rents on renewal of contracts jumped by 2.6% in January, and rents on contracts for new tenants surged by 6%.