Israel’s Economy Expands 3.7% in Q1

2025-06-16 10:25 By Joana Ferreira 1 min. read

Israel’s economy grew at an annualized rate of 3.7% in the first quarter of 2025, according to a second estimate, up from an initial reading of 3.4% and significantly higher than the revised 2.0% growth recorded in the previous quarter.

The expansion was supported by a temporary ceasefire in the Gaza Strip—lasting until mid-March—which allowed for a short-lived economic rebound before hostilities resumed.

The main driver of growth was a sharp rise in fixed investment, led by a recovery in the construction sector.

Additionally, higher exports and public spending offset lower consumer spending.

The Bank of Israel recently cut its full-year growth forecast to 3.5%, down from 4.0%, amid ongoing geopolitical uncertainty.



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