Israel’s economy contracted sharply in the second quarter of the year, with gross domestic product falling 3.5% compared to the previous quarter, according to figures released Sunday by the Central Bureau of Statistics.
Officials attributed much of the slowdown to the ongoing impact of the 12-day war against Iran, which has disrupted economic activity.
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Nahalat Binyamin pedestrian mall in Tel Aviv empty during the war against Iran
(Photo: Lihi Gordon)
The business sector was hit particularly hard, shrinking by 6.2%, the bureau said. Private consumption dropped 4.1%, while public spending fell 1%. Investment in fixed assets plunged 12.3%, signaling weakening business confidence. Exports of goods and services, excluding startups and diamonds, declined 3.5%, while imports, excluding defense-related purchases, rose 3.1%.
Economists say the disappointing data reflects the toll of war on both consumer and business activity. “These numbers highlight a significant contraction, particularly in the private sector and investment, which could weigh heavily on recovery prospects,” one analyst said.