The Media Line: Israel Inflation Hits 4-Year Low as November CPI Falls and Price Pressures Ease  

Israel Inflation Hits 4-Year Low as November CPI Falls and Price Pressures Ease  

By The Media Line Staff  

Israel’s annual inflation rate fell to 2.4 percent in November, marking its lowest level in four years and reinforcing a broader cooling trend that has brought price growth back within the government’s target range, according to data released Monday by the Central Bureau of Statistics.  

The November reading matched levels last seen in late 2021, before inflation accelerated and eventually peaked at 5.4 percent in January 2023. The latest data showed inflation easing further from October’s 2.5 percent annual rate and remaining squarely within the state’s 1–3 percent target band.  

On a monthly basis, the consumer price index declined by 0.5 percent in November, reversing an equivalent increase recorded in October and aligning with market expectations. The drop was led by sharp declines in airfare and vacation costs, alongside lower prices for fresh fruit and vegetables. These decreases were partially offset by higher costs for rent, beverages, and frozen or preserved vegetables.  

Several major components of the index also showed slower annual price increases. Housing inflation moderated to 3.3 percent from 3.6 percent in October, while transport and communication eased to 1.3 percent from 1.5 percent. Prices for miscellaneous goods and services also slowed modestly. Continued declines were recorded in clothing and footwear, furniture and household goods, and fresh produce.  

The sustained easing in inflation has already prompted the Bank of Israel to cut its base interest rate for the first time since January 2024, after several months of data confirmed a return to price stability.  

Gad Lior, a senior analyst at Yedioth Ahronoth, attributed the disinflationary trend primarily to currency strength and softer demand. He said the decline was driven by “the sharp appreciation of the shekel against major foreign currencies and weaker consumer spending, as households absorbed financial losses linked to recent tax increases.”  

Despite the improvement, Lior cautioned that additional rate cuts are unlikely in the near term. He cited the lack of an approved state budget for 2026, political uncertainty surrounding the contentious ultra-Orthodox draft law, and ongoing military tensions with Hezbollah in Lebanon as factors likely to keep monetary policymakers cautious.  

The November data reinforced expectations that inflation will remain contained in the near term, even as broader economic and security challenges persist.