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Israel's economy slumps 19.4% in the Q4 of 2024
The Israeli economy shrank 19.4% in the final three months of 2023 as the war has started to take a serious toll. This is the first time we've actually seen the econonomy shrinking in nearly two years. In the July to September quarter last year, GDP grew 1.8%. The worse-than-expected decline was driven by a 26.9% drop in private consumption, as confidence plummeted following the October 7 attacks and households cut back on spending. Fixed investment by businesses tumbled 67.8%, this is as there was a halt in residential building, military call-ups and a serious reduction in Palestinian workers. On the currency front, the Israeli shekel weakened slightly after the data release to trade at around 3.62 to the US dollar. Thanks to support from the central bank, it had staged a remarkable recovery since falling in the immediate aftermath of the October attacks. The stock market doesn't seem to be impacted for now - Tel Aviv 125 Index gained 0.6% on Monday. Nevertheless, the conflict is expected to cost Israel 70.3 billion dollars by the end of 2025, equivalent to around 13% of GDP, according to the Bank of Israel.
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