The Israeli economy shrank by 19.4% during the first three months of the current war with Hamas – October to December 2023 – according to data published last week by the Central Bureau of Statistics (CBS).
In total, the Israeli economy grew by only 2% in 2023. In terms of GDP per capita, this represents a contraction of 0.1%, coming after an increase of 4.4% in 2022. For comparison, in OECD countries GDP per capita increased by an average of 1.2%.
As a result of the war, sharp declines were recorded in the last quarter in all indicators of economic activity, except for public spending: business output fell by 32.3% and spending on private consumption fell by 26.9%. Investments in fixed assets in Israel crashed by 67.8%, exports fell by 18.3%, and imports by 42.4%.
Due to war expenses, public spending jumped by 88.1%.
"The composition of the gross domestic product changed due to the extensive mobilization of the reserve forces, payments for alternative housing for evacuees in accordance with the government plan, the lack of workers in the construction industry and more," the CBS researchers wrote.
In total, 2023 saw a 1.2% increase in business product, a 0.7% decrease in private consumption expenditure and a 2.8% decrease in private consumption expenditure per capita. Investment decreased by 1.9%, public spending increased by 8.3%.
This article was translated from Hebrew by Matt Levy.
