Israel Ranks Fourth Globally in Underappreciated Economic Metric
Translated & summarized from Maariv by baba
Israel ranks fourth globally in net credit extended to foreign economies relative to its GDP, driven by its strong high-tech sector and a surge in foreign direct investment despite the ongoing war. The Israeli shekel has also shown significant strength.
The story in 5 lines · by baba
- Israel ranks fourth globally in net credit to foreign economies as a percentage of GDP.
- Net credit to the world has risen to approximately $350 billion since the war began.
- Foreign direct investment in Israel increased by nearly 38% since October 7, 2023.
- The country's economic strength is attributed to its high-tech, cyber industries, and savings.
- The Israeli shekel has remained strong against major global currencies.
Israel has secured the fourth position worldwide in a significant but lesser-known economic indicator: net credit extended to foreign economies relative to its GDP. Since the outbreak of the war, Israel's net credit to the rest of the world has surged to approximately $350 billion, marking a 46% increase. This figure represents 50.5% of Israel's GDP, which stands at $692.4 billion.
This strong performance is primarily driven by Israel's robust high-tech and cyber industries, significant foreign direct investment (FDI), and a strong shekel. FDI into Israel has seen a remarkable increase of nearly 38% since October 7, 2023, reaching $329.6 billion by the end of the second quarter of 2026. This growth, despite the ongoing conflict, underscores global investor confidence, particularly in Israel's technological advancements during wartime.
Globally, Israel trails only Norway, Switzerland, and Japan in net credit extended as a percentage of GDP. Norway's strength stems from its oil and gas revenues, Switzerland's from high household savings, and Japan's from a long-standing zero-interest-rate policy. Israel's capacity, however, is largely attributed to its leading high-tech sector, including successful exits, high foreign exchange reserves held by the Bank of Israel, and continuous inflows of FDI.
The article also highlights the significant role of mandatory savings, such as pension and study funds, in Israel's economy, contributing to its overall financial strength. Despite a deficit in the primary income account due to multinational corporations repatriating profits, Israel's trade surplus in goods and services, especially in high-tech and defense exports, remains strong. This economic resilience is reflected in the shekel's stability and appreciation against most global currencies over the past year, easing import costs and facilitating international travel for Israelis.
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