Israel's Post-War Economic Recovery Slower Than Initially Estimated

Israel's economic recovery following its recent conflict with Iran is proving to be slower than earlier projections, according to updated figures from the Central Bureau of Statistics (CBS). The second estimate for the second quarter of 2026 indicates that the economy grew by 14.9% compared to the first quarter, a downward revision from the previously reported 15.4% growth. This adjustment is primarily attributed to a significant slowdown in the export of goods and services, which the CBS now estimates grew by 16.6% instead of the earlier figure of 25.2%.

Furthermore, investment in machinery and equipment saw a sharp reversal, shifting from a projected growth of 23.5% to an actual decline of 6.5%. While these decreases in exports and investments were partially offset by upward revisions in private and public consumption, as well as non-residential construction, the overall growth rate for the quarter was moderately weakened by half a percentage point.

The CBS emphasized that such revisions are a standard part of its statistical process, with the average adjustment to estimates made about a month after initial publication typically being only a tenth of a percentage point. Therefore, the current change is not considered unusual. In fact, when comparing the first half of 2026 to the second half of the previous year, a metric the CBS recommends to neutralize war-related fluctuations, growth was revised upward from 3.2% to 3.5%.

The final estimate for the second quarter's economic performance is expected to be released in approximately one month.