Israel’s economic momentum slowed markedly in the fourth quarter of 2025, with annualized GDP growth falling to 4.0%, down from a previously reported 12.7% in the third quarter of 2025. The latest figures, updated on 16 February 2026, highlight a pronounced moderation in activity after a surge earlier in the year.
The data are reported on a quarter‑over‑quarter annualized basis, meaning the current 4.0% rate reflects how the economy would grow over a full year if the fourth‑quarter pace were sustained, compared with the much stronger tempo recorded in the third quarter. The previous 12.7% reading captured the jump in output from the second to the third quarter, while the new figure measures the change from the third to the fourth quarter.
The sharp deceleration suggests that the factors driving Israel’s robust rebound in the third quarter did not persist into year‑end 2025, and that growth has shifted to a more moderate trajectory. Investors and policymakers are likely to interpret the new data as a signal that the post-surge phase of the expansion may be giving way to a more sustainable, but less dynamic, pace of economic activity.
