Overview
- Israel’s statistics bureau said GDP fell at a 3.3% annualized, seasonally adjusted pace in the first quarter, a deeper drop than many forecasters expected.
- The slump followed late‑February strikes on Iran that triggered missile barrages and Hezbollah fire, prompting six weeks of limits on gatherings, a month of school closures, and large reserve call‑ups.
- Private spending fell 4.7%, public spending 4.8%, business‑sector output 3.1%, and GDP per person 4.5%, according to the official breakdown.
- The finance ministry put the quarter’s drop at 9.5% in annual terms, and policymakers now project about 3.8% growth for 2026 if ceasefires hold and normal activity returns.
- The quarter’s damage was smaller than the 4.3% contraction during the 12‑day shutdown in June 2025, after conflict‑related hits that totaled roughly 8.6% of annual GDP over 2024–2025.