Sharp Cost-of-Living Surge Hits Israelis at Start of New Year

Israelis enter the new year facing a sharp rise in living costs, following a series of government decisions expected to fuel a new wave of price increases after two years of war in the Gaza Strip.

With the start of 2026, new hikes have come into effect across a wide range of sectors. According to the Israeli daily Yedioth Ahronoth, price increases now extend to electricity, water services, municipal property taxes, as well as food products and electric vehicles.

The measures have sparked growing concern among economists, who warn that the cumulative impact of the increases could weigh heavily on the Consumer Price Index (CPI). Analysts expect the index to record a noticeable jump in the coming months as state-driven price adjustments take hold.

The renewed surge in costs comes at a sensitive time for households already strained by prolonged economic pressures linked to the ongoing conflict and its aftermath, raising fears of further erosion in purchasing power and household stability.