Israel’s GDP Revision Shows a Sharper First-Quarter Drop

Israel’s gross domestic product fell at an annualized rate of 3.8% in the first quarter of 2026 compared with the final quarter of 2025, the Central Bureau of Statistics said in its second of three estimates. That is a steeper decline than the initial estimate, which put the drop at 3.3%.

On a per-capita basis, after accounting for population growth, GDP is now estimated to be 5% lower than in the previous quarter. Private consumption fell 5%, and business-sector product declined 3.8%. By contrast, compared with the same quarter a year earlier, GDP was still up 1.5% and business-sector product 1.9%.

The statistics bureau said the figures were significantly affected by Operation "Raging Lion" against Iran, which ended recently and began on February 28, during the first quarter. The revision was driven mainly by the business sector, where the annualized quarterly decline deepened from 3.3% to 3.8%.

The export picture was also revised down sharply. In the first estimate, goods and services exports were said to have risen 5.6%, but the second estimate cut that increase to 1.9%. The bureau also said that, compared with a year earlier, the data still show gains across most indicators, with only public spending showing a slight decline because war-related costs eased somewhat.