JERUSALEM (Reuters) – Israel’s economy grew slower than expected in the second quarter due to the ongoing war in Gaza with Hamas. GDP rose by only 0.3% from April to June, a drop from the previous estimates of 0.7% and 1.2%.
The economy was helped by increased consumer and government spending, as well as investment, but exports declined.
Recently, the Bank of Israel lowered its 2024 growth forecast from 1.5% to 0.5%.
As the economy weakens, inflation has risen, prompting central bank officials to hint at possible interest rate hikes, even though rates were held steady last week.
The first-quarter growth remained at 17.2% as Israel’s economy recovered from a sharp decline at the end of 2023, when the war began.
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