Israel's economy rebounded in the second quarter, recovering from a contraction sparked by the military campaign against Iran.
Gross domestic product rose 15.4% in annualized, seasonally adjusted terms, Israel's Central Bureau of Statistics reported on Sunday, above the median estimate of 8.3% in a Bloomberg survey of eight economists. In the first quarter, GDP declined by a revised 2.2%.
Exports of goods and services led the rebound, jumping 35.2%. Government consumption grew by 19.5% and private consumption rose by 14.7%. Fixed capital formation rose 6.3%.
Israel's central bank raised its growth forecast for the year to 4% last month, following better-than-expected first quarter data. The bank expects growth to accelerate to 5.5% in 2027.
The report is “fundamentally encouraging,” Ronen Menachem, chief markets economist at Mizrahi Tefahot Bank Ltd. said.
“While the directional rebound was expected, its force exceeded expectations, building on a first quarter that -— while contracted —- proved less severe than feared,” he said. “Nevertheless, the underlying data contains significant volatility and “noise,” making firm long-term extrapolations difficult at this stage.”
The growth figures are likely to figure in the Bank of Israel's next monetary policy decision, scheduled for Sept. 1. Last month, the central bank cut the base rate to 3.5%, its lowest level since late 2022, and signaled possible further easing ahead.
ALSO READ: Israeli Strikes Kill 11 In Lebanon In Worst Attack Since June Ceasefire
Figures released on Friday by the Central Bureau of Statistics show inflation slowed for a second consecutive month. July consumer prices rose 1.5% year-on-year, easing from 1.6% in June.
The GDP figures “do not create an urgent case for imminent interest rate cuts,” Menachem said. “We anticipate the Bank of Israel will weigh these caveats carefully alongside the cooler inflation prints released on Friday.”
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
