2025.08.1710:00:00UTC+00Israel's GDP Shock: Economy Reverses with -3.5% Annualized Growth in Q2

Israel's economy experienced a significant downturn in the second quarter of 2025, as the GDP annualized rate plummeted to -3.5%, a stark contrast to the first quarter's 3.5% growth. The dramatic reversal reflects a shift from positive economic momentum to contraction, according to the latest data updated on August 17, 2025.

The second quarter GDP figures point to a challenging economic environment, marking a downturn that could raise concerns among policymakers and investors. The quarter-over-quarter comparison highlights the abrupt nature of this economic change, as the previous quarter's robust growth has been replaced by contraction.

This unexpected decrease prompts an urgent analysis of underlying factors and potential consequences for inflation, employment, and overall economic health. Understanding the drivers behind this contraction will be crucial for Israel as it navigates through this financial turbulence and seeks to implement strategies that provide economic stability and growth moving forward.