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 indicated, according to updated figures from the Central Bureau of Statistics (CBS). The CBS's second estimate for the second quarter of 2026 shows the economy grew by 14.9% compared to the first quarter, a downward revision from the 15.4% growth predicted a month ago.

The most significant revision was in the export of goods and services, now estimated to have grown by 16.6% between quarters, down from a previous report of 25.2%. Investment in machinery and equipment also saw a sharp reversal, shifting from a projected 23.5% growth to a 6.5% decline.

These decreases in exports and investments were partially offset by upward revisions in private and public consumption, as well as non-residential construction. Consequently, the overall annual growth rate was moderated by a relatively mild half-percentage-point slowdown, rather than a collapse in all growth components.

The CBS noted that such updates are a routine part of its publication process, with revisions typically averaging only a tenth of a percentage point. The current change is not considered unusual. Furthermore, 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 actually revised upward from 3.2% to 3.5%.

The final estimate for the second quarter is expected to be released in about a month.