In the third quarter of the year, the months from July through September – which included the period of fighting between Israel and Hamas and its allies in Gaza – the economy actually contracted by 0.4%, after growing by 2.2% in the second quarter and 3.2% in the first quarter of 2014, the Central Bureau of Statistics reported on Sunday.
- Israeli household wealth grew 13% in year, among highest gains in world
- Israeli economy slowed sharply in Q2, even before Gaza war
- Despite Gaza war, exports turn higher in 3rd quarter
- Gaza war long over, but tourists still avoiding Israel
Business output also dropped in the third quarter, by 1.4%. Data released by the CBS also show that investment in residential construction declined in the third quarter by 2.1%. This followed a 2.3% decline in the second quarter and a 2% drop in the first quarter of 2014.
Imports of goods and services increased in the third quarter by 6.2%, after slumping 4.5% during the prior three months. Investment in residences, equipment and vehicles used by businesses fell by 3.6%, following a 4.8% drop in the prior quarter. Exports of goods and services dropped by 4.4%, driven by a 77.5% fall in foreign tourist spending, which is categorized as part of Israel’s export sector.