Israel GDP growth revised down to 0.3% as Gaza war takes economic toll

JERUSALEM (Reuters) - Israel's economy grew slower in the second quarter than previously thought, data showed on Tuesday, as Israel's war in Gaza against the Palestinian Islamist group Hamas continued to weigh on growth.

Gross domestic product rose by an annualised 0.3 in the April-June period, the Central Bureau of Statistics said in its third estimate, down from 0.7% reported a month ago and from an initial 1.2% published in August.

The economy was supported by gains in consumer and state spending and in investment in fixed assets, while exports fell.

Last week, the Bank of Israel trimmed its Israeli economic growth estimate in 2024 to 0.5% from a prior estimate of 1.5%.

Along with a weakening economy, inflation has spiked and central bank officials have warned of possible interest rate increases. It held rates steady last week for a sixth straight policy meeting.

First-quarter GDP growth was unrevised at 17.2%, as the economy bounced back from a steep contraction in the fourth quarter of 2023 when the war began.

(Reporting by Steven Scheer; Editing by Alison Williams)