Key facts
- Israel's economy contracted at an annualized rate of 3.8% in the first quarter.
- The decline was attributed to the war with Iran.
- Consumer spending, government spending, and exports all decreased.
- Fixed investment saw an increase.
- Growth is anticipated to rebound in the second quarter.
Israel's economy experienced a contraction of 3.8% on an annualized basis in the first quarter, as reported by the Central Bureau of Statistics. This downturn was primarily influenced by the ongoing war with Iran, which concluded with a ceasefire in April. The decline was marked by reductions in consumer spending, government expenditure, and exports, though these were partially counteracted by an increase in fixed asset investment. The Bank of Israel anticipates a rebound, projecting economic growth of 3.8% for the current year, contingent on the stability of the ceasefire. Forecasts suggest the economy is expected to grow by approximately 4% in 2026.