Israel GDP Growth Annualized

Israel’s economy shrank at an annualized rate of 3.9% in the second quarter of 2025, according to a third estimate, slightly improving from a 4.0% contraction reported in the second reading and reversing the 3.1% growth recorded in Q1. The decline marks the country’s first quarterly contraction since Q4 2023, reflecting the economic fallout from the ongoing “Am Kalvi” conflict. Household consumption fell 4.8%, government spending edged down 1.0%, and fixed capital formation plummeted 12.8%, while net trade was a drag as exports of goods and services dropped 5.7%, despite imports rising 1.1%. On a half-year basis, Israel’s GDP expanded 0.9% compared with the first half of 2024.