Below forecasts: the economy grew by only 1.2% in the second quarter of 2024

Israel’s gross domestic product rose by only 1.2% in the second quarter of 2024 (months April to June on an annual basis), below forecasts that predicted a 4.4% increase in GDP. In terms of GDP per capita, this is an annual increase of 0.4%.

In total, in the first half of the year, GDP was up by only 2.5% compared to the previous half. In the first quarter of this year the GDP increased by 17.3%, while in the last quarter of 2023 the GDP decreased by 20.6% following the outbreak of the Iron Swords War.

The low growth is due, among other things, to a 1.9% decrease in the business product and a 7.1% decrease in the export of goods and services excluding the start-up companies and diamonds. At the same time, there was an 8.2% increase in public consumption spending, and a 12% increase in private consumption spending (all numbers are annualized).

The investment in machinery and other industrial equipment decreased by 42.3% on an annual basis. Investment in the information and communication technology sectors decreased by 51.3%.

The decrease in investments in machinery and other equipment was affected both by a significant decrease in purchases of security equipment (after the significant increase in the first quarter of the year) and by a more moderate decrease in other investments.

The export of services decreased by 11.6% on an annual basis.

The gross domestic product is a figure that reflects all economic activity in the economy, and is seen as a basic indicator of the state of the economy. The low GDP growth may reflect that the recovery from the effects of the war is more difficult than expected.