Israel GDP growth revised down to 0.3pc as Gaza war takes economic toll

Israel’s economy grew slower in the second quarter than previously thought, data showed on Tuesday, as Israel’s war in Gaza against the Palestinian Islamist group Hamas continued to weigh on growth.

Gross domestic product (ILGDP=ECI) rose by an annualised 0.3 in the April-June period, the Central Bureau of Statistics said in its third estimate, down from 0.7 per cent reported a month ago and from an initial 1.2 per cent published in August.

The economy was supported by gains in consumer and state spending and in investment in fixed assets, while exports fell.

Last week, the Bank of Israel trimmed its Israeli economic growth estimate in 2024 to 0.5 per cent from a prior estimate of 1.5 per cent.

Along with a weakening economy, inflation has spiked and central bank officials have warned of possible interest rate increases. It held rates steady last week for a sixth straight policy meeting.

First-quarter GDP growth was unrevised at 17.2 per cent, as the economy bounced back from a steep contraction in the fourth quarter of 2023 when the war began.