Business and Economics newspaper and website Calcalist wrote on Monday that the recent war with Iran brought the regime’s economy back to a year, causing negative growth recorded in the second quarter of 2025.
The report cites official data from the Regime Statistics Center, showing that GDP fell by 3.5% compared to the previous quarter and about 1% on a simple quarter calculation.
“Reliance on imports remains high, and sanctions or cancellations of trade agreements could hit Israel’s economy heavily,” he said, adding that per capita production also fell 4.4%, given the population growth of 2% per year.
The commercial sector was the biggest hit, facing a 7% drop in its output and nearly double the overall slowdown in growth, according to the report. The severity of this decline is very worrying as JPMorgan estimates that the Israeli economy contraction is only 0.5% on its quarterly forecast, but it is expected to revise its previous forecast of 2025’s overall growth rate of 2.6%.
The Israeli economy has seen a recession since Prime Minister Benjamin Netanyahu’s administration launched the war of genocide with Gaza, but the attack war on Iran in mid-June cost an estimated $6 billion, but economists withstand slowing growth and widening.
Two consecutive quarters of negative GDP growth lead the administration to a recession. Analysts believe the current situation is imminent as it has stagnated living standards and slowed down the economic recovery.
The Calculist report concludes by warning that it should not be forgotten that the vulnerability to sanctions in the Israeli economy or cancellation of trade agreements, particularly with Europe, is so high that it could have great consequences for the future of the administration.
MNA