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The Melnick State of the Israeli Economy Index rose by 0.1% in February 2025, reflecting a moderate increase in business sector activity.

At the end of 2024, due to the introduction of the expected VAT increase, there is a rise in revenue in the economic sectors, which is an index of domestic demand and primarily of private consumption, which is revised in the other direction in January. A similar development is also evident in the industrial production index, which represents the supply side of the business sector. These fluctuations reflect speculative behavior and not actual fluctuations in economic activity, which continues to be moderate.

The import index, which consists mainly of inputs for domestic production, continues to decline and implies that the increase in activity in the future is not guaranteed. The number of employee posts in the business sector has increased and reflects the beginning of a return to the pre-war level of jobs.

Next month’s index will express an initial estimate of the impact of the renewed protest and the war in the south.

January 2025 Index components:

• Industrial production index: a decrease of 3.0% in January after an increase of 3.1% in December.

• Revenue in the economic sectors: a decrease of 7.9% in January after an increase of 5.1% in November.

• Import index: decreased by 0.5% in February after a decrease of 5.3% in January.

• Number of employee posts in the business sector: increased by 1.3% in December after a decrease of 0.2% in November.

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