In kindergarten, in the mortgage and in the supermarket: where do you feel the cost of living?
The slowdown in the economy also affects our expenses: a survey conducted among thousands of Israelis shows where we have started to cut back.
To the attention of the politicians: although a large part of the public blames the government for the situation, an absolute majority believes that the next government - and no matter who will form it, will not solve the economic problems
Walla!
Of money
10/31/2022
Monday, October 31, 2022, 08:52 Updated: 09:19
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The money is over.
Where do we choose to cut expenses? (Photo: ShutterStock)
Israelis are beginning to feel the cost of living and cut back on various expenses, primarily leisure and entertainment, non-urgent medicine and clothing.
From the data of a recent survey conducted on the cost of living by the consulting and research firm Tefen, among approximately 2,700 Israelis aged 25 and over, it was found that the expense that Israelis define as the heaviest in their pocket is the payment for childcare facilities (35% of respondents), housing (28% of respondents) and food (19%).
culture and entertainment.
The industry that will be the first victim of the slowdown (Photo: ShutterStock)
Entertainment, complementary medicine and fashion
It should be noted that although the children's facilities section took the first place in the burden of expenses, the majority of Israelis (88% of the respondents) indicated that their rent had increased significantly in recent months, with 42% of them indicating that their rent had increased by 20%, 39% indicating an increase of 10% in the rent, and 19% indicated a 5% increase.
However, it seems that the Israelis are not cutting back on housing expenses, but on other spending items, which are apparently seen as less necessary;
Most of them (54% of the respondents) cut about 500 NIS in
their leisure and entertainment expenses
in the last months, 38% of them cut from 500 to 1,000 NIS, and 10% of them cut over 1,000 NIS in this expenditure.
Non-emergency medicine
(complementary medicine, cosmetic surgeries, food supplements that are not part of a necessary menu, and more) is the second expense to which Israelis (35% of them) turned the ax of cuts during that period, when 54% of them cut it from 500 to 1,000 shekels, 34% cut it over NIS 1,000, and 12% of them cut it by NIS 500.
The third expense we chose to cut, according to the survey, is in
the clothing section
(28% of the respondents), where about 42% of the respondents cut more than NIS 1,000 in the last few months, 32% cut about NIS 500, and 26% About NIS 500 to NIS 1,000.
Assuming that this is indeed the case, the question arises when these cuts will start to be felt even more strongly on the supply side as part of the activities of local producers and importers, and what effect this will have on the economic activity as a whole.
A figure that will less surprise those involved in the real estate sector, who are familiar with Israeli consumer behavior in it, shows that despite the sharp increase in rent and apartment prices, and despite the economic uncertainty, 73% of Israelis stated that they would still consider buying an apartment for investment today, with the assessment that apartment prices will continue to increase (49% of respondents), or because there are no other investment alternatives (22%).
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Clothing and apparel.
Another expense section where we focus the cuts (Photo: Reuven Castro)
Do not believe that it will be good after the elections
Another figure from the survey can perhaps explain this and concerns the lack of belief of 73% of the respondents that any new government, regardless of its inclination to one of the parties on the political map, will act to address the cost of living and lower housing prices.
It should be noted that 35% of the respondents found that the government is to blame for the rise in the cost of living.
About 41% of the respondents gave it a failing grade in the economic aspect.
Not surprising then, because the majority of the respondents (48%) stated that their upcoming vote will be more influenced by political-security considerations than any other consideration, and only 27% of the respondents stated that the economic consideration will be the one that will guide their vote in the upcoming elections.
In regards to government intervention in the economy and addressing the cost of living, the majority of Israelis (56%) support raising taxes for the top deciles, alongside a significant increase in the minimum wage (81% of the respondents) and the allowances for the disabled and the less able (59% of the respondents).
Meli Bitzur Farnes, CEO of the consulting and research firm Tefen (Photo: Anat Kazola)
"adjusting themselves to the economic situation"
Meli Beitzur Farnes, CEO of the consulting and research firm Tefen
, told Walla! Money: "The Israeli public feels the cost of living deep in their pockets, with about half of them groaning under the payments of educational frameworks and food products, which have experienced several waves of price increases in recent months.
From the data it can be learned that the Israelis are adjusting themselves to the economic situation, but are not yet at an explosive point, in their view.
However, this is approaching with every interest rate increase and economic slowdown that is expected to be more noticeable in the near future, according to the data and the current expectations.
The picture of the situation that is already emerging for various organizations and businesses sets direction signs for the directions of action required of them for the coming period, and emphasizes the need to keep their hand on the business pulse while examining the mindset that generates Israeli demand.
It is interesting to find, however, that although the Israelis were forced to cut back on various expenses due to the waves of rising prices, and that the economic issue, along with the uncertainty surrounding it, became significant for them in recent months, most of them did not make it a consideration that would decide the direction of their vote in the upcoming elections, which mostly remained the political-security consideration .
The perception of the majority of Israelis that real estate prices have not decreased, and that it is still time to examine the purchase of investment apartments, is also surprising, despite the interest rate increases in the economy that raise financing costs, alongside the forecasts that predict a cooling in the Israeli real estate market.
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slowdown
cuts
Cost of living
recession