The Israeli economy unexpectedly shrank in the past quarter, mainly because the twelve-day war with Iran in June brought business to a virtual standstill.
Gross domestic product fell by 3.5 percent year-on-year, the Israel Central Bureau of Statistics reported Sunday. This is significantly lower than the average growth forecast of 0.2 percent among economists.
On June 13, Israel launched a surprise attack on Iran to disable the Islamic Republic’s nuclear program and military installations. According to Israel, these posed a serious threat to the country’s survival and security.
The Israeli central bank forecast growth of 3.3 percent for this year. To achieve this, the economy must accelerate significantly in the second half of the year.