Private consumption declined sharply in March and partially recovered in April; high-tech services exports remain strong

ISRAEL - In Brief 04 May 2026 by Sani Ziv

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Private consumption declines in March, recovery expected to be gradual Credit card purchases fell by 11.9% in March (real terms, seasonally adjusted), reflecting the disruption to economic activity caused by the war. By comparison, during Operation “Rising Lion” in June 2025, purchases declined by 10.4%. The March decline appears relatively moderate, given that the war lasted throughout the entire month (and into April), compared with only 12 days of fighting in June 2025. Looking ahead, the recovery in April is expected to be more gradual than the sharp 20% rebound recorded in July 2025, reflecting continued fighting in the north. Bank of Israel (Shva) data point to a partial recovery in April, although spending remains broadly in line with pre-war levels. Notably, in the last week of April (through April 27), purchases declined by 16%, likely reflecting renewed fighting in the north. At this stage, there are no clear signs of pent-up demand, reducing concerns about demand-driven inflation pressures. High-tech services exports remain strong  High-tech services exports showed some volatility at the start of the year, declining by 4.2% in February 2026, following a 5.0% decline in January. However, the overall picture remains positive. They rose by 5.0% in December–February compared with the previous three months, and by 15% year-on-year. As Israel’s main growth engine (around 11% of GDP), this supports a widening services surplus in the current account, contributing to shekel appreciation. In parallel, Israeli high-tech companies raised $1.3 billion in April, following $3.1 billion in Q1, highlighting continued access to external funding despite the war.