FX.co ★ Israel’s Economy Contracts Further as Q1 2026 Annualized GDP Falls 3.8%

Israel’s economy weakened in the first quarter of 2026, with annualized GDP shrinking by 3.8% quarter-over-quarter, according to data updated on 16 July 2026. The latest reading marks a deeper contraction than in the previous quarter, when GDP fell by 3.3% on the same comparison basis.

Both the current and prior figures are measured quarter-over-quarter on an annualized basis, meaning the first quarter’s 3.8% decline reflects the pace of contraction if Q1’s performance were sustained for a full year. The deterioration from the previous quarter’s 3.3% drop underscores mounting pressure on Israel’s economic activity as 2026 begins.