Israel's economy contracted sharply in the second quarter, shrinking at an annualized rate of 3.5% following a two-week shutdown during the June operation in Iran. The Central Bureau of Statistics reported declines across all major components of gross domestic product, including private and public consumption, investment, and exports, while imports saw a slight increase. The downturn was attributed mainly to reduced consumer spending and investment, with the Ministry of Finance forecasting continued effects into 2025. However, early signs of recovery have emerged in July and August, as consumer credit card purchases have rebounded. The Ministry of Finance has revised its growth forecast for 2025 downward in light of these developments.