The Bank of Israel published updated inflation expectations statistics, providing annual (2021–2025) and monthly (2025–2026) series covering 12‑month ahead private-sector forecasts, one‑year expectations derived from banks’ internal interest rates, one‑year expectations from inflation contracts, and capital-market breakeven and forward inflation expectations. The latest “current data” show average 12‑month ahead forecasts at 1.6%, one‑year expectations from internal interest rates at 1.8% and one‑year expectations from inflation contracts at 1.9%, with the “current” figures for market/internal/contract measures calculated as averages over the CPI month. Capital-market inflation expectations are derived from the spread between yields on unindexed government bonds and CPI-indexed government bonds and are presented alongside forward measures for later horizons. Current readings put one‑year breakeven inflation at 1.8%, with forward expectations of 1.8% for the second year, 2.0% for the third year and 2.3% for years three to five, while the five‑year expectation is 2.0% and the five‑to‑ten‑year forward rate is 1.9%. The Bank of Israel notes that market-derived expectations include an inflation-risk premium and can be affected by taxation, liquidity and market-depth differences, and that one‑year horizon biases were greater than usual in January 2024.
Bank of Israel 2026-04-20
Bank of Israel updates inflation expectations indicators showing 12-month forecast at 1.6% and 1-year breakeven at 1.8%
The Bank of Israel published updated 2021–2026 inflation expectations from private-sector forecasts, banks’ internal rates, inflation contracts, and capital-market breakeven and forward measures. Current 12‑month expectations range from 1.6% (private forecasts) to 1.9% (inflation contracts). Capital-market expectations are 1.8% for one and two years, 2.0% for three and five years, 2.3% for years three to five, and 1.9% for years five to ten. The Bank notes that market-based measures include an inflation-risk premium and can be distorted by taxation, liquidity, and market depth, with unusually high one‑year biases in January 2024.