Israeli economy contracts by 3.5 pct in Q2

JERUSALEM, Aug. 17 (Xinhua) -- Israel's gross domestic product (GDP) shrank by an annual rate of 3.5 percent in the second quarter of 2025 compared to the first quarter, according to data released by the country's Central Bureau of Statistics on Sunday.

The business sector saw the most significant decline, contracting at an annualized rate of 6.2 percent in the second quarter, after expanding by 4.4 percent in the first quarter.

Private consumption spending fell by 4.1 percent in the second quarter, following the same decline rate in the first quarter. Investment in fixed assets such as buildings and equipment also dropped sharply, down 12.3 percent.

The bureau said the growth figures were strongly affected by a 12-day war between Israel and Iran in mid-June, which disrupted economic activity.

Data from the bureau showed that Israel's GDP expanded by 3.4 percent at an annual rate in the first quarter.

In July, the Bank of Israel set its GDP forecast for 2025 at 3.3 percent, down from 3.5 percent in its previous forecast in April. Enditem