FX.co ★ Israel’s Economy Contracts 4% in Q2

Israel's economy contracted by 4.0% at an annualized rate in the second quarter of 2025, surpassing earlier estimates of a 3.5% decline. This downturn halts a five-quarter period of growth, primarily due to the ongoing conflict with Iran, which led to widespread business closures and negatively impacted consumer spending, exports, and investments. This represents the first quarterly economic contraction since the last quarter of 2023, when the economy plummeted by 21.0%. Between April and June, private consumption decreased by 4.4%, fixed investment dropped by 12.7%, and public spending fell by 1.0%. Meanwhile, exports saw a decline of 2.9%, and imports increased by 3.8%.