Inflation held steady at August’s 4.6% in September. Looking at the details of the release, education, culture and entertainment prices rose at a quicker pace in September compared to the previous month, while price pressures for transportation and communication eased.
The trend pointed up mildly, with annual average inflation coming in at 3.7% in September (August: 3.5%). Meanwhile, core inflation fell to 4.4% in September, from August’s 4.5%.
Lastly, consumer prices rose 0.19% in September over the previous month, swinging from the 0.28% drop seen in August.
September’s inflation rate was still well above the Central Bank’s 1.0–3.0% target range. On top of higher international commodity prices, inflation in Israel is being driven by the marked depreciation of the shekel so far this year and a tight domestic labor market. That said, inflation remains mild relative to most other developed economies due to the country’s large domestic gas production.
FocusEconomics panelists see consumer prices rising 4.3% in annual terms in 2022, which is up 0.3 percentage points from last month’s forecast. Our panelists see inflation of 3.1% in 2023.