Recent data point to a sustained recovery in economic activity in Q4, alongside cooling consumer confidence

ISRAEL - In Brief 15 Jan 2026 by Sani Ziv

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The Monthly Index of Economic Activity, published by the Bank of Israel, rose 0.3% in December, in line with its long-term growth trend. The index, which reflects the average monthly growth estimate for the period from October to December, suggests that growth in the fourth quarter resumed its rise, albeit at a moderate pace. The increase was supported by strong credit-card purchase data in November, an increase in exports of goods in October and December, growth in other services exports and tourism services in September and October, labor market indicators, higher tax revenues in October and November, and recent gains in the Tel Aviv stock market. These positive contributions were partly offset by weaker retail trade data in October and November and lower imports of durable consumer goods in October and December. The chart below shows the monthly change in Israel’s economic activity index. The bars represent the estimated monthly change in the economic activity index, while the orange line marks the long-term average and the dashed lines indicate the historical 25th–75th percentile range. Overall, after sharp volatility following the war with Iran, the data point to a gradual normalization and recovery in economic activity, with the most recent readings hovering around the long-term average. The monthly index of economic activitySource: bank of Israel At the same time, consumer confidence edged lower in December, slipping to -18 points, from -15 in October and November. While confidence remains relatively elevated compared with -25 points in September, ahead of the Gaza ceasefire, the December reading signals a mild deterioration in sentiment. Households are less opt...