As of May 2025, Israel's economy is navigating a complex landscape marked by resilience in certain sectors and significant challenges stemming from ongoing geopolitical tensions and global economic shifts.
Economic Growth and Outlook
In the first quarter of 2025, Israel's economy grew at an annualized rate of 3.4%, a notable improvement from the 1.9% growth in the previous quarter. This uptick indicates a rebound from the economic slowdown experienced during the height of the conflict with Hamas in Gaza, which began in October 2023. Despite this growth, the Bank of Israel has adjusted its 2025 GDP growth forecast to 3.5%, down from an earlier projection of 4.0%, reflecting ongoing uncertainties.