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Jun 23, 2025
Israeli economy faces 5% contraction due to wars
Israel's economy is set to shrink by 5% over the next few years, mainly because of the continuing military operations in Gaza and Iran.
Since the October 7 Hamas attack, many reservists have been called up for duty, which has pulled people away from their regular jobs and slowed down everyday business.
TL;DR
Economic growth has dropped sharply
Economic growth has dropped sharply—from 6.5% in 2022 to just 0.7% expected in 2024.
With fewer workers and no Gazan labor, business investment has plunged nearly 68%, while defense spending has jumped over 60%.
On top of that, Israel's budget deficit is now above 6%.