Economic Shock in Israel.. Sharp Contraction of 3.5% for the Second Quarter of 2025

The latest data released by the Israeli Central Bureau of Statistics revealed a significant decline in economic performance during the second quarter of 2025, with Gross Domestic Product (GDP) decreasing by 3.5%, following the war launched by Israel against Iran, which lasted 12 days and cast a shadow over various sectors.

The figures indicated that the commercial sector suffered a severe blow, while private consumption rates significantly declined, government spending decreased, and investments in fixed assets reached their lowest levels, reflecting a clear decline in investor confidence.

In a related context, Israeli exports experienced a sharp decline, except for some sectors such as startups and diamonds, while imports saw a slight increase.

An economist commented on these figures, saying: "These numbers highlight a significant contraction, especially in the private sector and investments, which may weigh down recovery prospects."

These negative indicators are expected to prompt the Bank of Israel to review its monetary policy, as observers anticipate that the central bank will resort to lowering interest rates during its scheduled meeting on September 29, in an attempt to revive the economy and regain growth momentum.