Israelis cutting back on spending as cost of living crisis deepens

Eighty per cent of respondents tell poll they have had to give up one or more item of expenditure


Israelis protest against the soaring housing prices in Tel Aviv and cost of living, on July 2, 2022. Photo by Tomer Neuberg/Flash90 *** Local Caption *** מחאה יוקר המחייה הפגנה מצב כלכלי תל אביב מחירי דיוק

Nearly one in three Israelis, and 40 per cent of those aged 25-44, cite the country’s high cost of living as the issue that most worries them, above even security and concern over democracy, according to a survey published this week.

Eighty per cent of respondents polled by the Israel Democracy Institute (IDI) said they have had to give up one or more item of expenditure, particularly leisure activities and vacations, and 30 per cent had to refrain from buying more essential items such as food and other basic products.

Of those concerned most about the high cost of living, around two-thirds said it was food prices that is the most significant factor in the crisis, while around half said it was housing costs, and 29 per cent cited indirect taxation.

The majority of the public, 60 per cent, believe that the government is to blame for the current cost-of-living crisis, while the share of those worried about the issue declines with age.

Conversely, the share of those worried about issues relating to the consequence of the proposed judicial reforms increases with age.

Most awarded the government a grade of “unsatisfactory” or “fail” for its policies aimed at lowering the cost of living, housing costs, and reducing social inequality. Around two-thirds think that Israel’s economic situation has become worse or significantly worse since the same period last year, and around half report that their personal financial situation has worsened.

After the high cost of living, by a fair margin, are three issues of concern: tensions between different groups within Israeli society (17 per cent), the future of Israel as a democratic state (15 per cent), and personal security (15 per cent).

The share of respondents worried about inter-group tension within Israel or the future of Israeli democracy, rises with income level.

Concern over personal security is also greater among residents of southern Israel, among whom it shares equal billing with the issue of the high cost of living.

Professor Itai Ater, Senior Fellow at the IDI, said: “In the last month alone, we have seen a wave of increases in food prices.

"The dam has burst, and almost all the major food companies have raised their prices, some of them significantly. It would seem that the food industry, which in the past was wary of a backlash from the public and the government, is taking advantage of the current situation in which public and government attention is focused on other issues, to raise prices and increase their profits at the public’s expense.”

Despite private food companies making the most of a distracted public, the director of the Centre for Governance and the Economy at the IDI, Daphna Aviram-Nitzan, said the public “distinguishes clearly between the responsibility of companies in the private sector and that of the government, and explicitly states that the government bears the main responsibility.”

The survey of 761 Israeli adult men and women was conducted between April 27 and May 1, and published ahead of the IDI’s Eli Hurvitz Conference on Economics and Society on May 30.

The conference will be attended by ministers and Knesset members, directors-general of government ministries, senior public officials and business figures, and representatives of civil society and academia.

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