Israel’s first-quarter GDP estimate revised down after war-related slump

Israel’s GDP in the first quarter of 2026 fell 3.8% at an annualized rate, or 1% compared with the final quarter of 2025, according to the Central Bureau of Statistics. That is a sharper decline than the bureau’s earlier estimate, which had put the drop at 3.3% annualized and 0.8% quarter on quarter.

On a per capita basis, the downturn was deeper, with GDP per person down 5% annualized and 1.3% quarter on quarter, compared with 4.5% and 1.1% in the previous estimate. The bureau noted that per capita GDP better reflects changes in living standards because it accounts for population growth as well as economic growth.

Measured against the first quarter of 2025, GDP still showed modest growth of 1.5%. The bureau said the quarter’s decline was driven mainly by the war of Shaagat HaAri, which broke out at the end of February.

Among the GDP components, private consumption fell sharply, and per capita spending dropped 6.1%. Current per capita consumption, including food and fuel, declined by about 10.2%. At the same time, investment showed positive signs, with fixed capital formation up 12.8% annualized, driven by a surge in investment in information and communication technology, which rose 61.6% annualized.