Israel Sees Spike in Inflation to 4.1% in August, Linked to Shekel Devaluation

Israel’s inflation rate jumped to 4.1% in August, up from 3.3% in July, marking the first increase in the year-on-year 12-month figure since January 2023, according to data released by the Central Bureau of Statistics. Analysts point to the shekel’s recent devaluation against the US dollar as a significant factor, leading to higher prices for imported goods.

The August data also marks a departure from the abnormal deflation recorded in the same month last year. As a result, fresh vegetables saw a price surge of 1.9%, even as the consumer price index for the month increased by 0.5% compared to July.

Concurrently, the country’s home prices showed a 0.1% decline in the June-July period, representing the fourth consecutive monthly decrease. This is a shift after nearly three years of rising home prices. Compared to June-July 2022, home prices were 3.2% higher in June-July 2023, the lowest annual increase in over two and a half years.