Israel’s gross domestic product (GDP) experienced a sharper decline in the final quarter of 2023 than initially reported, reflecting the economic impact of the conflict with Gaza, according to the Israeli Central Bureau of Statistics (CBS). On Tuesday, the CBS announced that the country’s GDP contracted at an annualized rate of 21.0% in the fourth quarter compared to the third quarter, marking a quarterly decrease of 5.7%.

This revision marks a worsening from earlier estimates. The preliminary figure released earlier in the quarter had indicated a 19.4% annualized decline, which was later adjusted to a 20.7% contraction. The CBS attributed the downturn directly to the outbreak of hostilities in Gaza, which escalated in the closing months of 2023.

The conflict led to significant disruptions across multiple sectors, contributing to a reduction in economic activity. The downward adjustment in GDP growth reflects the broader consequences of the war on Israel’s economy, including disruptions in trade, heightened security measures, and decreased consumer and business confidence.

The CBS data underscores the considerable economic strain faced by Israel amid the protracted military engagements. While the government has yet to release detailed breakdowns of sector-specific impacts, analysts suggest that key areas such as tourism, retail, and manufacturing likely faced acute pressure due to the conflict.

The economic contraction contrasts with Israel’s previous growth trends, which had been robust prior to the outbreak of hostilities. The revision in GDP figures highlights the challenge of maintaining stable economic growth amid ongoing security concerns.

As of now, the Israeli government has not provided a comprehensive recovery plan to address the economic fallout from the conflict. Observers note that further developments in the security situation and international responses could influence the trajectory of Israel’s economy in the coming months.