Israel’s economy surged at an annualized rate of 12.4% in the third quarter of 2025, rebounding strongly from a 3.5% contraction in the previous quarter, which had been hit hard by the war with Iran, according to data released Sunday by the Central Bureau of Statistics.
Business sector output rose even more sharply, expanding by 14.9% between July and September.
The sharp rebound was largely attributed to the depth of the previous quarter’s downturn, with all major indicators showing significant gains.
Private consumption, which has driven Israel’s recent growth, jumped by 23.0%, while investment in fixed assets soared by 36.9% — a rare increase in scope. Exports of goods and services rose by 18.9%, despite a drop in the dollar and euro exchange rates that typically reduce export profitability. Non-defense imports climbed 38.6%, marking the strongest quarterly increase.
In contrast, public consumption rose by just 4.4%, reflecting limited increases in civilian government spending even after the war with Iran.
Year over year, Israel’s gross domestic product rose by 3.5% in the third quarter. Business sector GDP was up 3.6%. Investment in fixed assets rose 9.4%, exports climbed 6.6% and imports increased 11.0%. Public consumption grew by 4.0%, while private consumption edged up 3.3%.