Israel's annual inflation rate eased to 1.9% in March 2026 from 2.0% in February, undershooting analysts’ expectations of 2.1%. Inflation has now remained within the Bank of Israel’s 1%–3% target range for nine consecutive months.
The deceleration was driven by slower price increases in several categories: housing (3.8% vs 4.2% in February), miscellaneous goods and services (3.5% vs 3.9%), health (1.9% vs 2.1%), and education, culture, and entertainment (0.7% vs 1.3%). Prices for clothing and footwear continued to decline at the same pace as in the previous month (-7.8% vs -7.8%).
In contrast, price pressures strengthened in food, including vegetables and fruits (2.5% vs 2.3%), and in transport and communications (0.7% vs 0.4%). On a monthly basis, the consumer price index (CPI) rose by 0.4%, following a 0.2% increase in the prior month.
