Israeli Economy

Israeli Economy – The Fundamentals

As our site is used by many people thinking of investing in Israel for the first time, we’ve made this special article on the overall economy of Israel. Though some facts about the Israeli economy are well known (such as its resilience), other aspects are less understood.

The key figures:

GDP (PPP 2014) $286,840 billion

GDP (Nominal 2014) $305,707 billion

GDP Growth (2015) 2.5%

GDP Per Capita (PPP 2014) $35,833

GDP Per Capita (Nominal 2014) $38,004

Inflation: 0.5%

An overview

The Israeli economy is considered relatively advanced and Israel is the highest ranked country in the Middle East on the UN’s Human Development Index. The hi-tech and industrial manufacturing sectors represent Israel’s major strength. Israel is also a world leader in diamond cutting and polishing.  Though just how Israel performs so well economically has remained somewhat of a mystery, its highly motivated workforce has been deemed critical. As of 2010 Israel is a member of the OECD.

Major sectors of the Israeli economy


Of course Israel is particularly well known for hi-tech which plays an enormous impact on the Israeli economy. Israel’s hi-tech sector is known by its nickname ‘Silicon Wadi’ which ranks second only to ‘Silicon Valley’ in California. Many major American companies including Microsoft, Apple and Intel have chosen Israel for its first foreign R&D destination.


Just under 3% of Israel’sGDP comes from the agriculture sector, and a similar percentage of the work force are employed in the sector. While most of Israel’s grain is imported, it is general self sufficient in other produce, such as fruit and vegetables. Israel is well known for its production of citrus fruits, and the ‘Jaffa Orange’ was developed there. The $1.3 billion of annual agriculture exports are an important part of the Israeli economy.


Israel used to import the vast majority of its energy, spending over 5% of its GDP on related products. Israel still tends to import around 100 million barrels of oil a year. The Israeli economy, has however, recently benefited from major discoveries of natural gas deposits which are predicted to make an enormous impact on the Israeli economy in the coming years.