Consumer Price Index in Israel rises by 0.7% and inflation decreases to 2.9%

SadaNews - The annual inflation rate in Israel recorded a decrease to 2.9% in August 2025, after the consumer price index rose by 0.7%, according to official data released today, Monday.

This follows an increase in the index of 0.9% in the same month of last year, which brought inflation within the target range set by the government for 2025, between 1% and 3%, potentially allowing the Bank of Israel to lower interest rates for the first time since January 2024.

In response to the controversy surrounding his remarks about Israel's isolation and the need for it to adapt to a self-sufficient economy, Israeli Prime Minister Benjamin Netanyahu addressed those he called "pessimistic forecasters of the economy," stating that "the stock market in Israel is the strongest in the world."

Netanyahu added that "the shekel has strengthened, the deficit has narrowed despite the war, and foreign investments in research and development are the highest in the world after the United States," considering that "investing in Israel is the wise choice."

He pointed out that his government will continue to "increase investments in weapon production so that we are not dependent on weak Western European leaders who yield to extremist Muslim minorities in their countries, and that is exactly what we are doing."

For his part, Finance Minister Bezalel Smotrich stated that "the stock market is rising and inflation is decreasing," believing that "the correct and responsible management of the economy amid wartime challenges is proving itself," indirectly calling on the Governor of the Bank of Israel to lower the interest rate, saying, "It is the turn of the Governor of the Bank of Israel."

According to the figures, residential apartment prices fell by 0.2% when comparing June-July 2025 with May-June 2025, while the annual increase in apartment prices was only 1.6%.

The data indicated that the consumer price index rose by 0.7% in August 2025 compared to July 2025, which led to a decrease in inflation from 3.1% to 2.9%, officially placing it within the target range set by the Bank of Israel, which is less than 3%.

Significant increases were recorded in the culture and entertainment sector by 2.9%, and in the transportation and communications sector by 1.6%. Fresh vegetable prices rose by 1.5%, housing prices by 0.8%, and apartment maintenance by 0.3%.

In contrast, fresh fruit prices fell by 2.7%, and clothing and shoe prices decreased by 1.6%, while furniture and household equipment prices dropped by 0.5%.

Regarding apartment rents, the monthly rent for tenants who renewed their contracts increased by 2.7%, while rent for new tenants rose by 5.5%.

Comparing May-June 2025 with June-July 2025 showed that apartment prices decreased by 0.2% across the country. In Jerusalem, prices fell by 0.1%, in the north by 0.4%, in Haifa by 0.8%, in the center by 0.9%, in Tel Aviv by 0.2%, and in the south by 0.4%. The index of new apartment prices also fell by 0.8%.

On the other hand, comparing June-July 2024 with June-July 2025 showed that annual apartment prices increased by 1.6%, with the increase focused in the north by 9.1%, in Haifa by 5.9%, in the south by 2.3%, and in Jerusalem by 1.9%.

In contrast, decreases were recorded in the center of the country by 1.1% and in Tel Aviv by 0.3%. The annual index of new apartment prices rose by 2.7%.