No economic contraction from Gaza war, updated statistics show

Israel's economy actually grew by an annualized .2% in the third quarter of 2014.

An Israeli tank drives as it returns to Israel from the Gaza Strip August 3, 2014 (photo credit: REUTERS)
An Israeli tank drives as it returns to Israel from the Gaza Strip August 3, 2014
(photo credit: REUTERS)
A third revision of Israel’s national accounts statistics has found that the economy did not contract in the third quarter of 2014, despite the 50-day war with Hamas.
Updated data released by the Central Bureau of Statistics on Sunday showed that Israel’s economy actually grew by an annualized 0.2% in the third quarter of 2014. The initial estimate in November found that the economy had contracted by an annualized 0.4%, and the second estimate at the end of December revised that number to a 0.1% contraction.
The upward revision reflected increased activity in private and public consumption.
The figure made headlines at the time, because it was the first quarterly economic contraction Israel had experienced in five years, since the global financial crisis roiled world markets.
Still, the war with Gaza had its effects on economic activity in Israel; 0.2% growth was still below the already moderate 1.9% in the second quarter and 2.8% in the first quarter.
The GDP in the business sector still shrank 0.5% in the third quarter, after rising 2.5% in the previous quarter and 2.3% in the quarter before that.
While the war was originally expected to shave 0.6% off the country’s annual economic growth, in December the Bank of Israel estimated that it cost the economy only 0.3%.