Israel's July inflation rises 0.3% on summer demand, transport costs

Israel's Consumer Price Index (CPI) saw a 0.3% increase in July compared to June, primarily fueled by seasonal summer demand and rising costs for transportation and leisure activities, according to the Central Bureau of Statistics (CBS).

Annual inflation currently stands at 1.5%. Key components contributing to the monthly rise include transportation prices, which increased by 1.4%, and culture and entertainment, up by 1.1%. Conversely, clothing and footwear prices dropped by 4.6%, and fresh fruit and vegetable prices fell by 3.5%. Furniture and miscellaneous goods and services also experienced slight declines.

The rental market continues to show upward pressure, particularly for tenants signing new leases. Rents for those renewing existing leases rose by 2.6%, while new tenants faced a more significant increase of 4.7%. The CBS noted that these figures provide an approximation of annual rent changes, as most lease agreements remain consistent throughout their term.

In the industrial sector, the Manufacturing Output Price Index for the domestic market decreased by 1.2% in July, largely due to a sharp 12% drop in refined petroleum product prices. Excluding fuels, this index remained unchanged from the previous month. On an annual basis, the Manufacturing Output Price Index fell by 0.5%.

Regarding home prices, the Home Price Index (including new and existing homes) rose 0.1% between May-June 2026. However, on an annual basis, home prices have fallen 1.5% compared to the same period last year. Monthly price increases were noted in Jerusalem (1.8%) and Haifa (1.5%), while prices fell in the Tel Aviv District (-0.7%). The New Home Price Index rose 0.5% monthly, but fell 2% annually. Over the past five years, new home prices have increased by 26.2%.