18 April, 2024
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Israel’s economy slumps 19.4 percent in the fourth quarter as war takes a toll


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London CNN  —  Israel’s output contracted sharply in the final three months of 2023, falling for the first time in nearly two years, as the war with Hamas takes a heavy toll on the economy.

Gross domestic product (GDP) plunged 19.4 percent on an annualized basis compared with the July-to-September quarter, when it grew by a revised 1.8 percent, Israel’s Central Bureau of Statistics said Monday in its initial estimate.

The worse-than-expected decline was driven by a 26.9 percent drop in private consumption, as confidence plummeted following the October 7 attacks and households cut back on spending.

Fixed investment by businesses tumbled 67.8 percent, “driven by a near-halt in residential building resulting from military call-ups and a reduction in Palestinian workers,” according to Liam Peach, senior emerging markets economist at Capital Economics. Exports declined 18.3. percent.

“While a recovery looks set to take hold in (the first quarter), GDP growth over 2024 as a whole now looks likely to post one of its weakest rates on record,” Peach said in a note Monday.

Last year, Israel’s economy grew 2 percent, according to the statistics office.

The Israeli shekel weakened slightly after the data release to trade at around 3.62 to the US dollar. But the currency has staged a remarkable recovery since falling in the immediate aftermath of the October attacks, thanks partly to support from the central bank.

The post Israel’s economy slumps 19.4 percent in the fourth quarter as war takes a toll appeared first on Egypt Independent.