Israel’s economy grew 2 percent in 2023, the country’s Central Bureau of Statistics said in its 2023 National Accounts report issued on Monday.
The latest growth figure is significantly lower than the previous two years. In 2021, Israel’s annual gross domestic product (GDP) reached 8.6 percent, the highest in 21 years, and in 2022, the country’s economic growth stood at 6.5 percent.
Analysts attributed the sharp drop in growth to the ongoing Israel-Hamas conflict, which broke out on Oct. 7, 2023, and resulted in a steep 19.4 percent drop in growth in the fourth quarter.
“The contraction in the fourth quarter was mainly affected by the widespread recruitment of reserve soldiers, spending on alternative housing for war evacuees, and the lack of construction workers,” Gad Lior, senior analyst for Yedioth Ahronoth daily newspaper, told Xinhua.
Israel’s private consumption expenditure decreased by 0.7 percent in 2023 after an increase of 7.4 percent in 2022. The public consumption expenditure rose by 8.3 percent last year, compared with a slight 0.1 percent increase in the previous year.
The report also showed that Israel’s goods and services exports decreased by 1.1 percent in 2023, following an 8.6 percent rise in 2022, while imports fell by 6.9 percent in 2023 after a 12 percent increase in 2022.
