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Israel’s economy has grown this year despite the ongoing war with Iran, with GDP per capita projected to reach $70,000 (£52,000) in 2026, according to figures released by the country’s finance ministry.
GDP grew by 3.2 per cent in the first half of 2026 compared with the second half of 2025, while inflation dropped from 2.5 per cent on the eve of Rosh Hashanah last year to 1.5 per cent now, which is at the lower end of the Bank of Israel’s target range.
Last year, foreign investment jumped 78 per cent to $26 billion (£19bn) – and this upward trend continued during the first half of 2026.
The government’s budget deficit fell from 4.7 per cent to 3.3 per cent over the year, although the ministry cautioned that it could increase slightly in the coming months. Israel’s debt-to-GDP ratio stands at 67.9 per cent.
Overall, the unemployment rate stood at 3.3 per cent, though the employment rate among Israelis aged 15 to 64 was 71 per cent, below the OECD average of 74 per cent.
Israel’s high-tech sector remained a major driver of the economy, with capital raised by the sector increasing 53.6 per cent in the first half of 2026 compared with the same period last year.
The ministry also cited the Tortoise Media Global AI Index, which ranked Israel third globally for AI commercialisation, sixth for development and seventh for research among 83 countries.
The latest figures demonstrate the economy’s resilience and continued investor confidence despite the war and prolonged uncertainty, the ministry said.
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