Israel: Inflation comes in at highest level since October 2023 in August
Latest reading: Inflation came in at 3.6% in August, which was up from July’s 3.2%. August’s reading represented the highest inflation rate since October 2023, was above market expectations, and was above the Bank of Israel’s 1.0–3.0% target range. The rise was primarily due to increasing price pressures for food, and transportation and communication.
The trend was unchanged, with annual average inflation coming in at July’s 3.1% in August. Meanwhile, core inflation rose to 3.5% in August from July’s 2.9%.
Lastly, consumer prices increased 0.93% over the previous month in August, accelerating from the 0.56% increase recorded in July. August’s figure was the highest reading since July 2022.
Panelist insight: On the latest data and outlook, Goldman Sachs analysts said:
“Inflation has surprised to the upside in recent months, prompting the BoI to remark that inflation has been on an upward trend and emphasise pro-inflationary risks stemming from the widening fiscal deficit. With food inflation – a CPI category which is highly susceptible to external factors – driving the rise, our base case remains that inflation momentum will decline in the coming months.”