Economic Growth in Israel
The Israeli economy recorded an average growth rate of 4.2% in the decade to 2022, above the 2.0% average for the Middle East & North Africa region. In 2022, the real GDP growth was 6.4%. For more GDP information, visit our dedicated page.
Israel GDP Chart
Israel GDP Data
2018 | 2019 | 2020 | 2021 | 2022 | |
---|---|---|---|---|---|
Economic Growth (GDP, ann. var. %) | 4.2 | 3.8 | -1.4 | 9.3 | 6.4 |
GDP (USD bn) | 375 | 400 | 412 | 490 | 525 |
GDP (ILS bn) | 1,347 | 1,425 | 1,417 | 1,582 | 1,764 |
Economic Growth (Nominal GDP, ann. var. %) | 4.8 | 5.8 | -0.5 | 11.6 | 11.5 |
Economy records sharpest contraction since Q2 2020 in Q4
GDP fell 19.4% in seasonally adjusted annualized rate terms (SAAR) in the fourth quarter of 2023, contrasting the 1.8% expansion recorded in the third quarter and a larger contraction than markets were expecting. Q4's reading marked the worst result since Q2 2020. The downturn reflected contractions in private consumption, fixed investment and exports; all three indicators were hit hard by the conflict with Hamas. In contrast, government spending surged due to war-related expenditure. On an annual basis, economic activity dropped 4.1% in Q4, contrasting the previous period's 3.6% growth. Q4's reading marked the largest drop since Q2 2020.
Private consumption fell 26.9% SAAR in Q4 compared to a 1.2% expansion in Q3. Moreover, fixed investment dropped at a quicker rate of 67.8% in Q4, compared to the 1.5% decrease logged in the prior quarter. Government consumption, meanwhile, grew at the fastest pace on record, expanding 88.1% (Q3: +7.9% SAAR). On the external front, exports of goods and services contracted 18.3% in Q4, marking the worst reading since Q2 2020 (Q3: +3.6% SAAR). In addition, imports of goods and services deteriorated, contracting 42.4% in Q4 (Q3: +2.3% SAAR).
Our Consensus is for growth to return in annual and quarterly terms in Q1 2024, though the ongoing war against Hamas will continue to weigh on activity somewhat.
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Israeli GDP projections for the next ten years from a panel of 19 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Israeli GDP.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Israeli GDP projections.
Want to get access to the full dataset of Israeli GDP forecasts? Send an email to info@focus-economics.com.
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