Israel Q4 GDP Revised to 21% Contraction, Hit by War with Hamas

ISRAEL - JERUSALEM. Israel's war against Palestinian militant group Hamas took a slightly larger toll on economic growth in the final three months of 2023 than previously thought.

The economy contracted an annualised 21.0% in the fourth quarter over the third quarter, the Central Bureau of Statistics said on Tuesday in its third estimate. It followed a 19.4% decline in its preliminary estimate that was revised to a 20.7% contraction last month.

The war has raged since Hamas' Oct. 7 cross-border attack on southern Israel and led to steep declines in the fourth quarter in exports (-22.5%), private spending (-26.9%), investment in fixed assets (-67.9%) and imports (-42.4%).

Government spending, though, jumped 83.7%.

On Monday the bureau reported that the annual inflation rate rose to a more than expected 2.7% in March from 2.5% in February.