Israel’s economy grew at an annualized rate of 14.9% in the second quarter of 2026, rebounding sharply from an upwardly revised 1.7% contraction in the first quarter as the impact of the war with Iran eased. The reading was slightly below the first preliminary estimate and market expectations of 15.9%. The downward revision mainly reflected weaker growth in exports of goods and services, excluding startups and diamonds, which rose 16.6% compared with 25.2% in the first estimate, as well as fixed capital formation, which weakened to 4.1% from 6.3%. Still, growth remained elevated, supported by strong gains in private consumption (15% vs 14.7%) and public consumption (22.2% vs 19.5%). The annualized growth rate for the first half of 2026 was revised higher to 3.5% from 1.5%.