Updated statistics show Israel’s war damage was worse than first estimated

An updated Central Bureau of Statistics estimate says the economic damage from March’s fighting against Iran under Operation "Roar of the Lion" was deeper than initially thought. The bureau now puts the hit to the economy at 3.8% of GDP in the first quarter, up from 3.3% in the first estimate published a month earlier.

The revised figure suggests the first assessment had been too optimistic and better reflects the effects of a prolonged war with Iran. The report says the slowdown was felt directly by households, companies, and exporters, not just in abstract macroeconomic data.

Per-capita GDP was revised to a 5.0% decline from 4.5%, business-sector output to a 3.8% drop from 3.1%, and private consumption per person to a 6.1% fall from 5.8%. Israeli exports were also revised sharply, from 5.6% growth to only 1.9%, as a stronger shekel and weaker activity limited gains.

The article says the revised figures align more closely with recent international forecasts that have lowered expectations for Israel. The OECD now sees annual growth of just 3.3% in 2026, while the Finance Ministry’s chief economist recently raised his forecast to 4% and the Bank of Israel projected 3.8%.

The broader concern is fiscal: slower growth means a larger budget deficit, since it is calculated as a share of GDP. That could force cuts in public services and eventually require higher taxes.