What’s the current rate of inflation in Israel? How does it compare to historical rates? And how does it affect you?
Inflation Announcements: What You Need to Know
Every month, the Israeli Central Bureau of Statistics (CBS) publishes the change in the Consumer Price Index (CPI), known as מדד המחירים לצרכן or simply מדד. The CPI measures the average change in prices of goods and services, serving as a key indicator of inflation.
On the 15th of each month (or the 14th if the 15th falls on a Saturday), the CBS announces the inflation rate for the previous month. For example, the inflation rate for November is published on December 15th.
Current Inflation Rate
The latest inflation data is…
Why Does Inflation Matter?
Inflation matters because it influences the cost of living, the value of money, and economic decision-making. For consumers, rising inflation means higher prices for goods and services, which can strain household budgets and erode purchasing power. It also impacts savings, as money set aside today may lose value over time unless it earns a return that outpaces inflation.
For borrowers, inflation affects the affordability of loans and mortgages. Certain loan types, such as CPI-linked mortgages, see payments increase as inflation rises, while fixed-rate loans provide more stability. On a broader scale, inflation shapes interest rates, wage growth, and economic policies, making it a crucial factor for anyone making financial plans, investing, or managing debt. Understanding inflation helps individuals and businesses prepare for its effects and make informed decisions.
To learn more about the impact of inflation on mortgages and loans, See How Inflation Affects Mortgages & Loans in Israel.
Historical Inflation Rates
For a quarter of a century beginning in the 1970s, Israelis grappled with hyperinflation. Rates soared to 100% annually or more, wiping out untold sums in its wake.
Beginning in the 1980s and 1990s, Israel implemented economic reforms which successfully curbed inflation.
In the 25 years from 1999 through 2023, there were annual inflation spikes as high as 6.5% and 5.3%. However, overall, the average annual inflation rate was only 1.6%.
Charting Inflation: A Look at Rates Over the Years
Below is a comprehensive chart displaying the full history of inflation in Israel, as sourced from the CBS. Data includes both annual and monthly figures, as well as averages for each – for the entire period as well as from 1999 through the present.
Final Thoughts
Inflation can feel like a daunting topic, but with the right information, you can make informed decisions and take advantage of opportunities.
As a certified financial coach and mortgage broker with experience in Israel’s unique economic landscape, I’m here to help you every step of the way. Contact me today to discuss your options and take the next step toward securing your future.
Image by Gerd Altmann from Pixabay
