Prolonged Iran War Forces Israel to Slash 2026 Growth Forecast
Earlier projections had estimated growth at 5.2 percent, but the ministry trimmed that to 4.8 percent in early March, shortly after the launch of the U.S.-Israeli strike on Iran, based on the expectation that the hostilities would be brief.
“As the conflict has continued, the ministry has further lowered its growth projection to 3.3-3.8 percent, depending on three wartime scenarios,” the announcement said.
Under the first scenario, where fighting with Iran persists until mid-April while the Lebanon front ends by April’s close, Israel’s 2026 growth is expected to reach 3.8 percent.
In the second scenario, if the Iran conflict continues until mid-April and hostilities in Lebanon drag on until the end of June, growth is projected at 3.5 percent.
Finally, in the third scenario, should the Iran confrontation extend until the end of April while fighting in Lebanon concludes by June’s end, the forecast drops to 3.3 percent.
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