Israel's economy took a bigger hit than anticipated following the conflict with Hamas in Gaza. The Palestinian group launched a deadly attack on Israel, leading to a high number of casualties and significant damage. The subsequent military campaign by Israel has also taken a toll on the Palestinian territory, resulting in a sharp decline in Israel's private spending, exports, and investment in fixed assets.
The Israeli economy suffered a substantial contraction following the conflict with Hamas in Gaza. The decline in private spending, exports, and investment in fixed assets, particularly in residential buildings, has been much worse than initially predicted. The impact of the conflict has led to a bleak growth outlook for the country in the coming years.
Furthermore, the conflict has also disrupted trade in the region, with Houthi rebels in Yemen targeting cargo ships on the Red Sea heading to the Suez Canal. This has led to concerns about the impact on global seaborne trade, as the Red Sea is a crucial route for cargo. Additionally, some of the world's major shipping companies had already altered their routes before this due to the situation in the region.