Weighed down by deadly war, Israel revises Q2 GDP estimates downward from 1.2% to 0.7%

JERUSALEM

Israel on Monday lowered its estimates for the growth of the country's gross domestic product (GDP), taking it down from 1.2% to 0.7% for the second quarter of the year as a year of expenses from its deadly war on Gaza also continue to pressure the economy and its activity.

In a statement, the state statistics bureau said GDP rose by annual 0.7% this April-June, down from an initial 1.2% as reported a month ago.

It added that private sector contracted by 2.7% but was compensated by a sharp rise in government funding which reached 8.2%.

Israel's jobless rate remained tight at 2.6% in August, the statement also said.

It noted that Israel's goods and services exports (except for diamond exports) fell by an annual 8.4% in the year's second quarter, while imports (except for diamond and weapons imports) dropped 9.3%.

Israel's budget deficit continues to feel the impact of the country’s ongoing deadly offensive on the Gaza Strip, with the budget deficit growing gradually this year.

The budget deficit to the country's GDP ratio was at minus 8.3% in August, increasing from minus 7.6% in June and minus 6.2% in March and minus 4.1% last December.

In August alone, the budget deficit was at 12.1 billion shekels ($3.22 billion).

Israel’s offensive on Gaza, which has continued since an attack by Hamas last October, has resulted in over 41,200 Palestinian deaths, mostly women and children, according to local health authorities.

Nearly a year of the deadly attacks, which government opponents charge are meant to ensure the political survival of Prime Minister Benjamin Netanyahu, also require huge spending from the Israeli budget and have hit the country's economy.

*Writing by Ahmed Asmar