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Israel's economy contracts 3.3 percent

War sparked by attacks on Iran deals a heavy blow to the Israeli economy

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May 17 · 2 min read

Photo: Israel Belkind and Fanny Abramovitch (original) “The Provisional Council of State Proclamation of the Flag of the State of Israel” of 25 Tishrei 5709 (28 October 1948) provides the official specificat / Wikimedia Commons (Public domain)

Israel's economy suffered a serious blow following attacks on Iran carried out with US backing. The economy shrank 3.3 percent on an annualized basis in the first quarter of 2026, laying bare the mounting economic cost of war.

Regional tensions and military operations have weighed on output, tourism, and investment. Economists warn that the ongoing conflict will jeopardize Israel's growth targets.

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PrimaryTRT HaberMay 17, 2026

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Israel's economy contracts 3.3 percent

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