Israel's Economic Activity Index Rises 2.5% in June

Israel's Economic Activity Index rose by 2.5% in June. This index reflects the average growth estimates for the three months from April to June, influenced by improvements in card purchases, goods exports, consumer goods and manufacturing input imports, industrial production, the labor market, retail, and stock indices. The Bank of Israel explained that the increase in the June index was partly due to the exclusion of the lower economic activity levels observed during the 'Lowering Lion Operation' in March from the comparative baseline. The GDP for the first quarter decreased by an annualized 3.8%, and production in the corporate sector also fell by 3.8%. The high-tech sector absorbed some of the economic shocks, with high-tech funding in the second quarter remaining similar to the first quarter at around $4 billion. The consumer confidence index remained negative at -16.16%, while card payments increased by an annualized 4.2% compared to the previous year. Service exports decreased by 1.2% in April compared to the previous month. The Bank of Israel projected GDP growth rates of 4.0% for 2026 and 5.5% for 2027, while the IMF lowered its growth forecast for 2026 to 3.5%. Both institutions acknowledged the potential for recovery but warned that labor supply constraints and security uncertainties could disrupt the growth trajectory.