Israel-Hamas war: Tel Aviv revises Q2 growth downwards

Israel's growth slowed more than initially projected over the second quarter, as war with Hamas, nearing its one-year anniversary, and tensions with Hezbollah cloud the economy.

Gross domestic product rose an annualised 0.7% in seasonally adjusted terms compared to the first quarter, according to data published by Israel's Central Bureau of Statistics on Monday. Earlier figures published last month said the figure was likely 1.2%. One of the biggest drivers of the slowdown was exports, which declined by 8.3%, excluding diamonds and startup companies, versus an initial projection of 7.1%.

Investments in fixed assets improved and are estimated to have grown 4%.


That was not enough to offset a slowdown in imports. Private consumption grew 11.4%, down from the initial estimate of 12%. Government consumption, mainly related to the needs of war, rose 8.2%.

Mkts Drop on Reports Netanyahu May Fire Defence Chief
Israeli markets weakened after widespread reports in local media that Prime Minister Benjamin Netanyahu was considering firing his defence minister, Yoav Gallant, and replacing him with Gideon Saar, an opposition lawmaker. The shekel fell 0.7% to 3.74 per dollar as of 2:25 p.m. in Tel Aviv, one of the worst showing globally.

Netanyahu's office put out a statement soon after the reports came out. "The reports on the matter of negotiations with Gideon Saar are not correct. " Gallant's office declined to comment.