Israel Strives for Economic Recovery Amid War’s Impact

News Analysis

After more than a year of Israel’s most expensive war, leaders are now focusing on the economic impact while cautiously embracing some positive developments.

The war disrupted various sectors such as agriculture, tourism, foreign investment, and the high-tech industry, which is crucial for Israel’s security needs.

Despite the challenges, Israel’s economy has shown resilience, with the Bank of Israel reporting a healthy annual growth rate of 3.8 percent during the third quarter, a significant improvement from the previous quarter’s meager 0.3 percent growth.

The Tel Aviv Stock Exchange’s TA-125 index reached an all-time high in December, showing a more than 28 percent increase in the stock market for the year.

There are positive signs of economic recovery, including increased home buying.

However, concerns were raised about the impact of the war on the high-tech industry, which accounts for a significant portion of Israel’s economy.

An Exodus of Professionals?

The war led to a 30 percent drop in investment in the high-tech sector in the first year, causing some tech professionals to leave the country after a devastating attack by Hamas in October 2023.