Israel. According to data released by Israel’s Central Bureau of Statistics on Sunday, the country’s gross domestic product (GDP) declined by 3.5 percent year-on-year in the second quarter of 2025.

The business sector was the worst hit, losing 6.2 per cent in the second quarter. In the first quarter, the sector grew by 4.4 percent.

Private consumption spending declined by 4.1 per cent for the second consecutive quarter, while investment in permanent assets such as buildings and appliances declined sharply by 12.3 per cent.  According to the bureau, the 12-day war between Israel and Iran in June severely disrupted the country’s economic activity.

In the first quarter, Israel’s GDP grew by 3.4 percent year-on-year. But in July, israel’s central bank lowered its GDP growth forecast for 2025 from 3.5 percent to 3.3 percent.