FX.co ★ Israel’s Economy Expands 3.7% in Q1

Israel's economy experienced an annualized growth rate of 3.7% in the first quarter of 2025, according to revised data, an increase from the preliminary estimate of 3.4% and markedly higher than the 1.9% growth observed in the preceding quarter. This expansion was facilitated by a temporary ceasefire in the Gaza Strip, effective until mid-March, which enabled a brief economic upswing before conflicts resumed. A significant contributor to this growth was a pronounced increase in fixed investment, particularly driven by a resurgence in the construction sector. However, during this period, both private and public consumption witnessed a decline, and there was also a reduction in exports of goods and services. In light of the ongoing geopolitical uncertainty, the Bank of Israel has recently revised its annual growth forecast for the year, reducing it from 4.0% to 3.5%.