Sharp decline in travel abroad + consumer confidence rebounds

ISRAEL - In Brief 07 Dec 2023 by Jonathan Katz

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Sharp decline in travel abroad In November, 167,000 Israelis went abroad, a decrease of 77% compared to November last year. Due to such a sharp decline in the number of passengers and in the number of flights, it is reasonable to assume that the Central Bureau of Statistics will decide not to measure the "travel abroad" item (weighing 3.5% in the CPI) in November and will attribute the rate of change to the change in the general index (we expect +0.1%). Therefore, the effect of the sharp appreciation of the shekel in this month will be deferred to the coming months, when this sector returns to more regular activity. In November, the number of incoming tourists dropped by 87% (compared with Nov. 22) to 41,000. Supermarket chains reported a 1.3% increase in sales in October, while food chains reported a sharp increase of 5.2%. In November, the Poalim Consumer Confidence Index increased by 4.1 points, returning to pre-war levels, influenced by a partial return to routine, a decline in the number of incoming missiles (including the ceasefire), and a growing sense that the conflict is not escalating to the North. This improvement in consumer confidence, if it continues, supports an increase in private consumption and a reduction in deflationary pressures in the economy.