Israel's Economy Contracts Sharply Amid Ongoing Conflict, GDP Plunges 19.4%

• Israel's GDP fell 19.4% in Q4 2023, the first contraction in nearly 2 years, due to the war with Hamas • The decline was driven by sharp drops in private consumption (-26.9%), business investment (-67.8%), and exports (-18.3%) • The conflict is expected to cost Israel $70.3 billion by end of 2025, equivalent to 13% of GDP • The central bank has cut 2023 growth forecast from 3% pre-war to 2% • Moody's delivered Israel's first ever credit rating downgrade due to elevated political risk and deteriorating finances from the war