Israel's Economy Grows Nearly 10% Despite Three Years of War

Despite three years of conflict since an escalation, Israel's financial market has shown unexpected resilience, with its gross domestic product (GDP) growing by nearly 10% during this period, according to the publication Calcalist. The Tel Aviv Stock Exchange's flagship TA-125 index surged by 120%, outperforming some major global markets. This growth occurred despite significant economic challenges, including production losses totaling 177 billion shekels and a rise in the debt-to-GDP ratio to 70%, as reported by the Bank of Israel. The high activity in the technology sector, expansion of the defense industry, and continuous investment inflows have helped the market overcome these difficulties. Analysts suggest that investors often react to peak uncertainty with anticipatory growth. The domestic securities market achieved record results, bolstered by demand from institutional investors, which also strengthened corporate bonds. The banking and insurance sectors made substantial contributions, with significant increases in profitability. The currency market also reflects recovery trends; after an initial sharp rise in the dollar's value at the conflict's outset, the Israeli shekel has since strengthened. The dollar has fallen below pre-war levels due to institutional investor activity and foreign currency sales. The Bank of Israel has shifted from emergency interventions to stabilizing the financial system, indicating market confidence in the long-term outlook.