Israel’s economic outlook remains resilient and optimistic, even amid ongoing conflict and domestic challenges. Foreign investment has played a key role in stabilizing the economy, with renewed investor confidence emerging following Israel’s recent 12-day conflict with Iran. Despite waging multi-front wars and facing political unrest at home, Israel’s economic engine continues to thrive.
The Tel Aviv Stock Exchange (TASE) has soared to record highs, delivering the strongest market performance in the Middle East since the war began on October 7, 2023. After initially plummeting 23% following the Hamas attack and Israel’s declaration of war, the market made a full recovery by Q1 2024. As of July 17, 2025, TASE has surged more than 200% from its October 2023 low.
Israel’s high-tech sector continues to drive growth, accounting for 20% of GDP and 56% of exports. Startup activity and innovation have remained strong, with increasing global recognition of Israel’s technological capabilities. According to Avi Hasson, CEO of Startup Nation Central, global investors now view Israel as a place where security risks are declining and economic fundamentals are strengthening.
Although the country’s GDP contracted nearly 20% in Q4 2023 due to collapsing private consumption and investment, it closed the year with 2% growth. The rebound continued into 2024 with a further 1% expansion, largely supported by government spending. The OECD now forecasts 4.9% economic growth for Israel in 2026.
Investor participation is also on the rise. A TASE report notes that 161,000 new trading accounts were opened in 2024—three times more than in 2023. Another 87,000 accounts followed in the first half of 2025, with 33,000 linked to investment houses.
According to Hadar Romano of TASE, 2023 was a year of uncertainty, but 2024 saw public confidence return as investors seized opportunities in low-priced local indices. With a strengthened tech sector, proven military capabilities, and increasing investor faith, Israel appears poised for continued economic success.
Tags: Israel economy 2025, Tel Aviv Stock Exchange surge, Israel GDP growth, Israeli tech sector, foreign investment Israel, Startup Nation Central, Middle East stock market, Israel investor confidence