In the second quarter of 2025, Israel’s GDP contracted by 3.5%, driven mainly by short-term interruptions in economic activity and operational restrictions linked to the 12-day conflict with Iran.
Private sector spending fell by 4.1%, reflecting weaker consumer confidence and shifts in purchasing behavior under tension.
Government investment also declined by 1%, as budget allocations and the rollout of public projects were delayed.
The most significant impact of the war was seen in fixed-asset investment, which plunged 12.3%, signaling halted or postponed industrial and commercial projects.
Exports of goods and services dropped 3.5%, underscoring supply chain disruptions and reduced foreign demand.
The data highlights how even brief conflicts can weigh on annual economic growth and underline the need for careful planning to manage economic and security risks.
NOURNEWS