Weekly report, September 14, 2026: August CPI in focus, fiscal position remains strong, political deadlock persists

ISRAEL - Report 14 Sep 2026 by Sani Ziv

The main focus this week is the August CPI, which we expect to rise by 0.8% m/m, lifting annual inflation to around 1.7%. A higher-than-expected reading, particularly above 0.8%-0.9%, together with higher oil prices and increased geopolitical uncertainty, could shift the Bank of Israel’s relatively dovish stance.

Beyond inflation, the broader macro picture remains mixed. Fiscal data remained strong, while the latest activity indicators point to moderate growth and some softening in household demand. Higher defense expenditure remains the main short- and medium-term fiscal risk.

On the political front, the closing of candidate lists produced limited changes to the electoral map, with neither main bloc currently showing a clear path to a 61-seat majority.

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