Israel’s April CPI due today: we expect 0.6% rise—ceasefire progress may influence BOI policy

ISRAEL - In Brief 15 May 2025 by Sani Ziv

---

The Central Bureau of Statistics is expected to release April’s Consumer Price Index (CPI) data today, and our expectation is for a 0.6% monthly rise, bringing the annual inflation rate to around 3.1%. Seasonal drivers behind the headline figure While 0.6% may appear elevated, April is traditionally a high CPI month, with an average increase of 0.4%, mainly due to seasonal effects. That’s largely due to seasonal patterns: the Passover holiday usually leads to increased spending on vacations abroad and locally (4% and 8% respectively), and there’s almost always a rise in clothing and footwear prices this time of year (2%). On top of that, fuel prices rose by 1.1% in April, which alone could add about 0.04 percentage point to the headline figure. Housing prices (particularly rent renewals) may also surprise to the upside, which could result in a stronger-than-expected print. That said, April CPI has historically shown high volatility—with much softer readings recorded in some years, such as 0.1% in 2014, 0.2% in 2017, and 0.3% in both 2019 and 2022. Implications for monetary policy Therefore, the April CPI reading will offer key insights into near-term inflation dynamics in Israel. A significant upside or downside surprise could influence the Bank of Israel’s upcoming interest rate decision in May, and more notably in July. While annual inflation is currently projected to fall below the upper bound of the target range by June or July, a substantial downside surprise in April’s CPI, combined with persistently low inflation expectations, could prompt the central bank to adjust its policy stance sooner than anticipated. Next rate decision dates and outlook The Bank of Israe...