• العربية
  • فارسی
BrandBrand
  • Iran Insight
  • Politics
  • Economy
  • Analysis
  • Special Report
  • Opinion
  • Podcast
  • Live TV
  • Iran Insight
  • Politics
  • Economy
  • Analysis
  • Special Report
  • Opinion
  • Podcast
  • Live TV
  • Theme
  • Language
    • العربية
    • فارسی
  • Iran Insight
  • Politics
  • Economy
  • Analysis
  • Special Report
  • Opinion
  • Podcast
  • Live TV
All rights reserved for Volant Media UK Limited
volant media logo

Israel’s economy shrank amid war with Iran

Aug 17, 2025, 16:16 GMT+1Updated: 03:00 GMT+0
People look at an impacted site following missile attack from Iran on Israel, in Bnei Brak, Israel June 16, 2025.
People look at an impacted site following missile attack from Iran on Israel, in Bnei Brak, Israel June 16, 2025.

Israel’s economy shrank 3.5 percent in the second quarter of the year as the 12-day war with Iran disrupted businesses and investment, the country’s Central Bureau of Statistics said on Sunday.

From April to June, Israel’s business sector contracted 6.2%. Private consumption dropped 4.1%, public spending fell 1%, and investment in fixed assets plunged 12.3%, signaling weakening confidence.

Exports of goods and services, excluding startups and diamonds, declined 3.5%, while imports, excluding defense purchases, rose 3.1%.

The downturn followed the June conflict with Iran, which began after Israel attacked military and nuclear sites on June 13.

Iran responded with missile strikes that forced many Israelis into shelters.

The United States joined on June 22 with airstrikes on Iran’s nuclear facilities at Fordow, Natanz, and Isfahan. A US-brokered ceasefire took effect on June 24, ending the 12-day war.

Bank of Israel Governor Amir Yaron told Bloomberg in late June that the fighting was likely to cost nearly $6 billion or 1% of GDP.

Analyst Andreas Krieg told TRT World that overall losses could reach between $11.5 billion and $17.8 billion, around 2% to 3% of Israel’s economy.

Costly for Tehran

The conflict also took a heavy toll on Iran’s economy.

Krieg estimated Iran’s direct and indirect losses at $24 billion to $35 billion, equal to 6% to 9% of its $380 billion GDP.

The conflict also dealt a heavy blow to Iran’s trade: non-oil exports in June totaled $3.4 billion, according to Iranian customs statistics—a 34% drop from a year earlier.

Iran’s digital economy was also hit.

The communications minister reported a 30% contraction and losses of 150 trillion rials (about $170 million) in one month, attributing the damage to widespread internet restrictions imposed during the fighting.

Most Viewed

Iran's Revolutionary Guards unveil new underground missile site
1

Iran's Revolutionary Guards unveil new underground missile site

2

US moves aircraft out of second British base over Iran threat - WSJ

3

Iran picks another IRGC general as new Iraq envoy: who is Mesgarian?

4

Iran arrests several in hijab crackdown on popular Tehran street

5
ANALYSIS

Trump’s Iran diplomacy faces a test: Can both sides claim victory?

Banner
Banner
Banner
Banner
Banner
Banner
Banner

Spotlight

  • Trump wants to keep Iran blockade. Can the Persian Gulf sustain the standoff?
    INSIGHT

    Trump wants to keep Iran blockade. Can the Persian Gulf sustain the standoff?

  • Iran state TV debate signals cautious openness to nuclear talks

    Iran state TV debate signals cautious openness to nuclear talks

  • The price Iranians paid for 47 years of revolutionary promises
    ANALYSIS

    The price Iranians paid for 47 years of revolutionary promises

  • Trump’s Iran diplomacy faces a test: Can both sides claim victory?
    ANALYSIS

    Trump’s Iran diplomacy faces a test: Can both sides claim victory?

  • We argued about US midterms until someone mentioned rent
    TEHRAN INSIDER

    We argued about US midterms until someone mentioned rent

  • Oil prices or US prestige? Tehran analysts weigh Trump's next move
    INSIGHT

    Oil prices or US prestige? Tehran analysts weigh Trump's next move

  • Iran acquires oil facilities in China to bypass US sanctions, leaked document shows
    EXCLUSIVE

    Iran acquires oil facilities in China to bypass US sanctions, leaked document shows

  • Iran’s northern routes test the limits of US bid to extend blockade overland
    ANALYSIS

    Iran’s northern routes test the limits of US bid to extend blockade overland