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16.06.202610:24:08UTC+00Israel Q1 GDP Revised to Sharper Contraction

Israel’s economy contracted at an annualized rate of 3.8% in the first quarter of 2026, following a downwardly revised 2.9% expansion in Q4 2025, according to secondary estimates. Economic activity in the first quarter was heavily disrupted by the “Harry’s Roar” war, which weighed on overall output and dampened domestic demand. Private consumption declined by 5.0%, and public consumption fell by 4.8%. Business-sector output also shrank by 3.8%, further weakening overall economic performance. These declines were partially offset by a 12.8% increase in fixed asset investment. Externally, exports of goods and services—excluding start-ups and diamonds—rose by a modest 1.9%, while imports, excluding defense-related imports, ships, aircraft, and diamonds, jumped by 32.7%.

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