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Wednesday, October 15, 2025
Israeli annual inflation dropped more than expected in September
Add ToI as a Preferred Source on GoogleSharon Wrobel is a tech reporter for The Times of Israel
Israeli annual inflation in September dropped more than expected, led by declines in the costs of fresh fruit and foreign travel, along with entertainment and culture, data released by the Central Bureau of Statistics show.
Annual inflation over the past 12 months decelerated to 2.5 percent, down from 2.9 percent in August, 3.1% in July, and 3.3% in June. The inflation rate in August moved within the government’s annual target range of between 1% to 3% for the first time since June 2024.
On a monthly basis, the consumer price index (CPI), a measure of inflation that tracks the average cost of household goods, fell in September by 0.6%, above analysts’ expectations of a decline of between 0.2% to 0.3%.
Israel Manufacturers’ Association President Ron Tomer called on the central bank to act and cut interest rates as soon as possible to support exporters, who are facing financing difficulties, while a strengthening shekel is hurting the competitiveness of Israeli exports.
“At a time when inflation is slowing and exporters are facing a global market full of uncertainty and deal cancellations, it is necessary to ensure that monetary policy does not deepen damage to the economy’s main growth engine,” says Tomer.
In September, declines were seen in the prices of fresh fruit, which were down 3.2%, entertainment and culture fell 2.4%, while communication and transportation prices slipped 2.2%. Expenses for foreign travel dropped 16.2%, and costs of accommodation and travel in Israel were down 9.8%.
These were offset by notable increases in the costs of fresh vegetables, which rose by 3.5%, car insurance was up by 0.7%, and healthcare, by 0.3%.
“The correction in flight prices this month is very significant and the main reason for the downward surprise in the consumer price index,” says Mizrahi Tefahot Bank chief strategist Yonnie Fanning. “There is potential for further declines in flight prices, in light of the increased supply as more foreign airlines are resuming their flight services to Israel, but also as a result of a stronger shekel.”
Rents on renewal of contracts rose 2.6% in September, and rents on contracts for new tenants jumped 5.3%
The Times of Israel Community.