Israel's Q1 GDP revised down to an annualized contraction of 3.8%, with both private consumption and exports weakening

(1) Data released by the Israeli Central Bureau of Statistics on Tuesday showed that the annualized quarter-on-quarter GDP for the first quarter was further revised down from the initial value of -3.3% to -3.8%. The previous value (fourth quarter of last year) was slightly adjusted from +2.9% to +2.8%, indicating that the extent of economic contraction exceeded earlier estimates. (2) Looking at the component data, exports declined by 6.3%, private consumption expenditure decreased by 5.0%, and government spending dropped by 4.8%. The simultaneous weakness of these three major demand segments significantly dragged down the overall economy. (3) The investment item recorded positive growth of 12.8%, becoming one of the few bright spots in this quarter’s economic data. However, this increase is not enough to offset the downward pressure caused by declines in consumption and exports. (4) Per capita GDP, calculated on an annualized basis, fell by 5.0%, reflecting that the impact of economic contraction on households was even more pronounced, as the decline in per capita output exceeded the overall GDP decrease. (5) Going forward, the focus will be on whether the easing of geopolitical tensions can drive a gradual recovery in exports and private consumption, as well as whether sustained investment growth can provide support for economic stabilization in the future.