The Bank of Israel published updated inflation expectations data showing current one-year expectations at 1.5 percent based on capital market measures and 1.8 percent based on the average of private-sector forecasts, internal interest rates of the five large banks and inflation contracts. Longer-term market-based expectations remained contained, at 1.7 percent for the second year forward, 2.0 percent for the third year forward, 1.9 percent for years 3 to 5, 1.6 percent for five years and 1.5 percent for years 5 to 10. Compared with June 2026, most measures were unchanged. The average 12-month forecast increased from 1.7 percent to 1.8 percent, while the third-year forward expectation rose from 1.9 percent to 2.0 percent and the years 3 to 5 forward measure from 1.8 percent to 1.9 percent. The Bank of Israel notes that capital-market-based expectations are derived from breakeven inflation between indexed and unindexed government bonds and may include risk premiums and biases related to taxation, liquidity and market depth.
Bank of Israel2026-07-20
Bank of Israel updates inflation expectations, one-year readings range from 1.5 percent to 1.8 percent and longer-term measures remain between 1.5 percent and 2.0 percent
The Bank of Israel updated its inflation expectations data, with current one-year readings at 1.5 percent from capital markets and 1.8 percent from forecasts, bank internal rates and inflation contracts. Longer-term expectations remained in a 1.5 percent to 2.0 percent range, with only modest increases from June in some forward measures.