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<\/p>\nIsrael’s economy contracted sharply at an annualized rate of 3.3% in \u200bthe first three months of the year, the \u200cCentral Bureau of Statistics said Sunday, as the war against Iran weighed on output.<\/p>\n
The \u200bdecline was not as severe as \u200ba 4% drop forecast in a \u2060Reuters poll of economists, but it demonstrated a continued strain on the country’s economy after years of fighting across the region.<\/p>\n
The economy grew 2.9% \u200bin 2025 and was expected to bounce \u200bback in 2026 to more than 5% growth after a cease-fire was agreed in October to end the Gaza war.<\/p>\n
Despite the cease-fire, the Israeli attacks on the Palestinian territory have continued, and since then, Tel Aviv has also been involved in the ongoing U.S.-Iran conflict.<\/p>\n
The growth took \u200ba hit after the U.S.-Israeli attacks on \u2060Iran began on Feb. 28, resulting in weeks of ballistic missile fire from Iran that closed schools while businesses suffered.<\/p>\n
The \u200bBank of \u200bIsrael currently \u2060sees the economy growing 3.8% this year, depending on whether \u200ba cease-fire forged last month with \u200bIran \u2060holds.<\/p>\n
In the first quarter, consumer spending fell 4.7%, exports declined 3.7% and government spending \u2060shed \u200b4.8%. Investment in fixed \u200bassets rose 12.6%.<\/p>\n
On a per capita basis, the economy shrank \u200b4.5%.<\/p>\n
<\/p>\n
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