Israel’s consumer prices rose 0.4% in July, bringing the annual inflation rate down to 3.1% from 3.3% the previous month, according to data released by the Central Bureau of Statistics.
The report is expected to prevent the Bank of Israel from cutting interest rates next week and likely in September, as inflation remains above the government’s 3% annual target.
Prices climbed in transportation (1.6%), culture and entertainment (1.3%) and housing (1.1%). Overseas travel jumped 11.9%, contributing more than half of the month’s overall increase while domestic vacations and tourism rose 6.3% during the first month of summer holidays.
Fresh vegetables and fruits fell 0.9% and home furniture dropped 0.4%. Early end-of-season sales lowered clothing and footwear prices by 4.2%, offsetting roughly a tenth of the CPI rise.
Rents increased 2.6% for renewing tenants and 5.4% for new tenants.
Housing prices continued to decline. Comparing May–June 2025 transactions with April–May, apartment prices fell 0.5% overall and new apartment prices dropped 1.5%. Regional changes included: Jerusalem (-0.1%), North (-0.4%), Haifa (-0.7%), Central (-0.9%), Tel Aviv (-1.3%) and South (-0.1%).
Compared with the same period last year, overall apartment prices rose 2.5%, down from 3.9% in the previous report. New apartment prices rose 4.3% with increases in every region: North (8.2%), Haifa (5.5%), South (2.7%), Jerusalem (1.7%), Central (1.3%) and Tel Aviv (1.1%).
The average transaction price fell to 2.27 million shekels in the second quarter of 2025, down from 2.35 million in the first quarter.