Israel’s economy expanded at an annualized rate of 4.0% in Q4 2025, slowing sharply from an upwardly revised 12.7% growth in Q3, according to first estimates. The slowdown was driven by weaker domestic demand, with private consumption falling 3.6% and fixed asset investment declining 6.4%. Business GDP rose 7.1%, partially offsetting the weakness, while public consumption edged up 1.7%. On the external side, exports of goods and services, excluding start-ups and diamonds, surged 25.6%, while imports fell 3.9%, excluding defense imports, ships, aircraft, and diamonds. For the whole year, Israel’s economy expanded 3.1%.