Israel Headline Inflation Edges Down by 0.1pp to +1.5 yoy, In Line with Expectations

Economics Research 14 August 2026 | 4:36PM BST

Israel: Headline Inflation Edges Down by 0.1pp to +1.5%yoy, In Line with Expectations

Bottom Line: Headline inflation edged down by 0.1pp to +1.5%yoy, in line with our Johan Allen | forecast and consensus expectations. The decline was driven by a broad-based Goldman Sachs International moderation across both core and non-core categories of the CPI basket. Among the Kevin Daly non-core components, there were declines in food inflation (reflecting lower fruit | Goldman Sachs International and vegetable prices) and energy inflation (as domestic fuel prices were lowered in July). Our own measure of core inflation edged down in annual terms, from +1.7%yoy to +1.6%yoy, and core momentum continues to run in the lower half of the BoI’s +1.0-3.0% target range (Exhibit 1). Within core, goods inflation remains particularly weak, which we attribute to pass-through from the sharp appreciation of the Shekel during the past year. There were also declines in core services, housing and tobacco, however, momentum in housing inflation continues to be elevated due to the owned dwelling services category of the CPI basket (Exhibit 3). The only main category which saw higher inflation was airfares (from -6.5%yoy to -3.4%yoy), however, given its lower weight, its contribution to the headline figure was relatively small.

Inflation Jul-26 Jun-26 May-26 Apr-26 Mar-26 Feb-26 Jan-26 CPI %yoy %mom (sa, annl.) %yoy Core (GS)* %mom (sa, annl.) Core (GS grouping)* Core Goods %yoy - %mom (sa, annl.) - Core Services %yoy %mom (sa, annl.) - Housing %yoy %mom (sa, annl.) Tobacco %yoy %mom (sa, annl.) - Regulated Services %yoy %mom (sa, annl.) - Airfares %yoy - %mom (sa, annl.) Non-Core (GS grouping) Food and Beverages %yoy %mom (sa, annl.) - Energy and Fuel %yoy %mom (sa, annl.) -

*We include tobacco and regulated services in our overall core measure to maximise comparability with the BoI's core measures

Source: Goldman Sachs Global Investment Research, Haver Analytics

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Exhibit 1: Our Core Inflation Measure Remains in the Lower Half of the BoI’s +1.0-3.0% Target range

Our Core Inflation Excludes Food, Beverages, Energy and Fuel

Source: Goldman Sachs Global Investment Research, Haver Analytics

Exhibit 2: Core Goods Remains Weak; Services and Exhibit 3: Momentum in Housing Inflation Continued to Housing Inflation Declined Slightly in July Rise in July

Our core goods and services measures exclude regulated prices, and our Source: Goldman Sachs Global Investment Research, Haver Analytics housing breakdown excludes other housing expenses (which appears in services inflation).

Source: Goldman Sachs Global Investment Research, Haver Analytics

Alessa Ann Abraham*, Johan Allen and Kevin Daly

*Alessa is an intern in the CEEMEA Economics team.