Israel’s economy shrank unexpectedly by 1.6% year-on-year in the first quarter amid rising global inflation, which is broadly slowing growth forecasts.
In Israel, exports and public spending fell in the first quarter of the year, disappointing economists who forecast GDP growth of 2.3%.
2021 was a difficult year for the Israeli economy, which recovered strongly from the pandemic and showed a growth rate of 8.1%, thanks to increased investment in the country’s high-tech industries.
But Russia’s war in Ukraine and the sanctions imposed in response have overshadowed the prospects for the global economy, sending energy prices soaring and curtailing supply chains already hit by the pandemic.
It is also noteworthy that the Nasdaq has recorded a significant decline recently, which has a negative impact on Israel, as many of its technology companies are listed in the US.