<div id="readability-page-1">By Steven Scheer JERUSALEM, May 17 (Reuters) - Israel's economy began 2026 with a slowdown, hit by war with Iran, but growth is expected to recover as long as the conflict does not reignite. Gross domestic product contracted at an annualised rate of 3.3% in the first three months of 2026, the Central Bureau of Statistics said on Sunday, less severe than a 4% drop forecast in a Reuters poll of</div>

<p>Israel's economy contracted at an annualized rate of 3.3% in Q1 2026 due to the war with Iran. However, growth is anticipated to rebound if the conflict does not escalate further, according to the Central Bureau of Statistics.</p>

- Israel's economy experienced a slowdown at the beginning of 2026 due to ongoing conflict with Iran.  
- The country's gross domestic product contracted at an annualized rate of 3.3% in the first quarter, which was less severe than the 4% drop predicted in a Reuters poll.  
- Growth is projected to recover if the conflict does not reignite.

Israel's economy shrinks in first quarter but seen rebounding after Iran war