Israel's Economy Shows Strong Recovery in Hebrew Year 5786
Israel's economy demonstrated significant positive performance during the Hebrew year 5786, according to data released by the Ministry of Finance. Both macroeconomic indicators and capital markets showed improvement, signaling a robust recovery.
On the macroeconomic front, inflation decreased from 2.5% to 1.5% annually. The cumulative deficit also improved, falling from 4.7% of GDP to 3.3%, a reduction of 1.4 percentage points. The debt-to-GDP ratio stands at 67.9%, considerably lower than the OECD average of 111%. The labor market remained stable with a low unemployment rate of 3.3%, compared to the OECD average of 4.9%. Notably, Israel's risk premium dropped by 29%, nearing pre-war levels.
Capital markets also experienced a strong year. The TA-125 index on the Tel Aviv Stock Exchange surged by 35% since the start of 5786. The Israeli Shekel strengthened by 11% against the US dollar, and the yield on 10-year government bonds decreased by 7.2%, easing financing conditions.
Foreign investment in Israel saw a substantial increase of 78% in 2025, reaching $26 billion. Furthermore, high-tech companies raised 53.6% more capital in the first half of 2026 compared to the same period in 2025.
Israel also maintained its position as a global technology leader, particularly in artificial intelligence. The country ranks third worldwide in AI trading, sixth in development, and seventh in research among 83 nations.
