Israel July consumer prices rise 3.1% y/y; est. +3.1%

Israel July consumer prices rise 3.1% y/y; est. +3.1%

In July 2025, Israel's consumer price inflation rate increased by 3.1% year-over-year (YoY), matching market estimates [1]. This uptick in inflation was primarily driven by rising prices for food, transportation, and communication services, according to the latest data from the Central Bank of Israel.

The June 2025 inflation rate stood at 3.3%, which was an increase from May's 3.1% [1]. The current inflation rate of 3.1% YoY is within the Central Bank's target range of 1.5% to 3.5% [2]. The Bank of Israel has kept its key interest rate steady at 4.5% since March 2025, aiming to manage inflation while supporting economic growth [1].

For the first seven months of 2025, Israel's trade deficit widened to USD 54.45 billion, compared to USD 51.35 billion in the same period of 2024 [1]. This widening trade deficit is attributed to a 14.7% increase in exports and a 11.5% rise in imports. Notably, imports of consumer goods, raw materials, and diamonds increased significantly, while imports of fuels and ships/aircraft decreased [1].

Despite the trade deficit widening, Israel's economy expanded by 3.5% in Q1 2025, driven by strong domestic demand and a rebound in exports [1]. The country's GDP growth is expected to ease to 1% in 2024, according to the latest projections [1].

In summary, Israel's July consumer price inflation rate of 3.1% YoY is in line with market estimates, driven by increased prices for food, transportation, and communication services. The trade deficit widened due to higher imports, but the economy continues to expand, supported by strong domestic demand and a rebound in exports.

References:

[1] https://tradingeconomics.com/israel/balance-of-trade
[2] https://www.focus-economics.com/country-indicator/israel/inflation/