Israel-Hamas war takes toll on Israel's 2023 GDP

Israel’s war against Hamas took a slightly larger toll on economic growth in the final three months of 2023 than previously thought.

Gross domestic product decreased an annualized 21.0% in the fourth quarter over the third quarter, declining 5.7% at a quarterly rate, the Central Bureau of Statistics reported Tuesday. This third estimate followed a 19.4% decline in its preliminary estimate, which was revised to a 20.7% contraction last month.

GDP is a measure of the value created through the production of goods and services in a country. It is often used as a measure of the health of an economy.

The fourth-quarter contraction in the market was directly impacted by the outbreak of the Israel-Hamas war, the statistics bureau said. The makeup of the GDP changed due to the large call-up of reserve forces, payments for housing for the evacuees, a lack of manpower in the construction industry, and more factors, it said.

There was an 83.7% annualized increase in government spending in the fourth quarter compared with the third quarter.

There was also a 26.9% annualized drop in private consumption, a 22.5% annualized drop in export of goods and services, and a 42.4% annualized drop in imports of goods and services in the fourth quarter compared with the third quarter.

Israel's Q4 affected by war outbreak

There was a 20.7% annualized increase in government spending, a 7.9% annualized decrease in private consumption, and a 15.2% annualized decrease in the import of goods and services in the fourth quarter of 2023 compared with the fourth quarter of 2022.

The annual inflation rate rose to a slightly more than expected 2.7% in March from 2.5% in February, the statistics bureau reported Monday.