Israel GDP

Economy rebounds in Q2 2026

GDP reading: Israel's GDP increased 15.4% in seasonally adjusted quarter-on-quarter annualized (SAAR) terms in Q2, following a 2.2% contraction in the previous quarter. Q2's reading was the strongest since Q1 2024. Though a bounce-back was to be expected after war with Iran disrupted economic output in Q1, the rise in GDP far exceeded market expectations. That said, Israel’s GDP figures tend to be volatile from period to period, making it hard to read too much into the second quarter reading.

Broad-based acceleration: Compared to the previous quarter's data, figures in Q2 improved for private consumption (+14.7% in seasonally adjusted quarter-on-quarter annualized (SAAR) terms vs -4.6% in Q1), government consumption (+19.5% vs -7.4% in Q1), exports of goods and services (+35.2% vs -0.4% in Q1) and imports of goods and services (+27.0% vs +22.1% in Q1). In contrast, the reading for fixed investment softened in Q2 (+6.3% vs +19.1% in Q1). In annual terms, economic output grew 6.9% in Q2, following 2.4% growth in the prior quarter.

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 25 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.

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