Israel's CBS: Economy recovered faster than expected, growth - 15.4%

Israel's Central Bureau of Statistics raised its estimate of GDP growth in the second quarter of 2026 to 15.4% on an annualized basis, returning to the initial estimate. Data for the first quarter was also revised upward, with a contraction of 1.5%. Growth was driven mainly by government spending and defense consumption, while exports and domestic investment were weaker than forecasts.

Israel's Central Bureau of Statistics (CBS) has again raised its estimate of economic growth in the second quarter of 2026 to 15.4% on an annualized basis, returning to the initial estimate after a September downgrade to 14.9%. At the same time, data for the first quarter was revised: the economic contraction was 1.5% instead of the previously estimated 1.7% and 2.2%. Growth between the first and second halves of 2026 is now estimated at 3.7%. However, the structure of growth has changed: exports excluding startups and diamonds grew only 17.7% versus the initial 25.2%, and total exports grew 26.6% instead of 35.2%. The main driver was government spending, revised from 19.5% to 22.4%, primarily due to defense consumption (growth from 14.7% to 20.4%). Excluding foreign production, growth would have been 13.8%. Domestic economic growth without foreign production remains low at 1.3%. Investment in fixed assets grew only 4.1% versus the initial 6.3%, with ICT investment growing 152% (revised from 181%) and investment in machinery and equipment contracting 6.5%. Private consumption grew 14.6%, and per capita spending on durable goods grew 29.8%. Civilian imports of goods grew 37.3%. The next revised estimate will be published on November 16.