Ceasefire growth, factory funding and market gains split the war aftermath
Israel's economy rebounds at 15.4 per cent annualised after the ceasefire. Iran says oil can no longer be sold and the state funds factories it once taxed. Gulf markets rise while few ships cross Hormuz.
Economics & Markets··Night
Deferred demand returns in one Israeli quarter
Israel's economy grew 15.4 per cent at an annual rate in the second quarter after contracting 2.2 per cent in the first, as consumption, government spending and exports deferred during the war with Iran came back at once. In quarterly terms output rose 3.6 per cent. Business sector activity increased 16.6 per cent at an annual rate, private consumption 14.7 per cent and government spending 19.5 per cent. Exports of goods and services excluding startups and diamonds rose 25.2 per cent, and imports excluding defence 22.7 per cent. The Central Bureau of Statistics said the sharp second-quarter increase reflects the rise in private consumption, public consumption and exports of goods and services. This is the first full quarter after the ceasefire in which pent-up demand and public spending arrive together; the pace looks high because activity deferred in wartime is now being released.[1]
Iran's state funds factories it once taxed
Iranian President Masoud Pezeshkian said imported goods now reach Iran through alternative channels rather than the direct routes they once took, which raises their final cost, and that state revenue has fallen because oil can no longer be sold. He said a large number of factories had been destroyed, that the state can no longer collect tax from them, and that in some cases it must provide them with funds so they keep operating. Blocked oil sales and industrial sites now loading the public balance sheet show postwar Iran carrying revenue loss and factory funding at once. The state turns former tax bases into spending lines to keep damaged capacity alive, while the shift of imports onto indirect routes raises final costs.[2]
Gulf indices rise while Hormuz traffic stays thin
Saudi Arabia's Tadawul All Share Index rose 0.9 per cent to 10,920 on Sunday, led by Al Rajhi Bank at 1.5 per cent and Saudi Aramco at 1 per cent, as regional markets advanced despite the stalled effort to end the Iran conflict. Qatar's benchmark added 0.2 per cent to 10,045, helped by a 1.5 per cent gain at Qatar National Bank. Oman rose 0.3 per cent to 7,535, Kuwait was unchanged at 9,295 and Bahrain slipped 0.1 per cent to 1,952. Egypt's EGX30 climbed 1.1 per cent to 55,855, with Telecom Egypt up 3.6 per cent. Brent crude settled at 88.52 dollars a barrel on Friday, up 1.67 per cent, and only a handful of vessels passed through the Strait of Hormuz that day. Read beside Israel's post-ceasefire demand rebound and Iran's state factory funding, the Gulf equity gains despite thin strait traffic show that the war's economic traces do not collapse into one price or one growth rate. In the same window one economy rebounds, another loads the public books, and regional indices advance while seaborne traffic stays thin.[3], [1], [2]
