Israel Economic Activity March 2024

Israel: Composite State of the Economy Index dips in March

The Bank of Israel’s Composite State of the Economy Index fell 0.05% month-on-month in seasonally adjusted terms in March (February: -0.05% mom). Decreases in industrial production, services and retail trade revenue, and building starts negatively impacted the Index, outweighing higher imports of consumer goods and production inputs, goods and services exports, job vacancies, and credit card purchases.

On an annual basis, economic activity fell at a quicker rate of 1.8% in March (February: -1.7% yoy).

Looking at Index data for Q1 as a whole shows that the economy should have grown from Q4 but stayed smaller than its pre-war level, as investment, tourism and private consumption continued to be dampened by the conflict.

On the outlook, EIU analysts said:

“We expect a surge in government consumption to be sustained into 2024. However, this will not fully offset the impact on growth of security restrictions, the dampening of private consumption, labour supply disruption (due to the call-up of military reserves and banning of Palestinian workers) and weakening investment. We do not expect the economy to return to its pre-war level until later in 2024.”

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