Nvidia's Impact Drives Israeli Economic Growth Figures
Translated & summarized from Globes by baba
Israel's economic growth figures are heavily influenced by Nvidia's activities, particularly through its acquisition of Mellanox. Without Nvidia's contribution, the country's GDP growth would be significantly lower, impacting policy decisions and international forecasts. For instance, growth was 3.5% last year, but only 2.1% without Nvidia. This reliance has led to concerns regarding potential impacts from recent developments at the tech giant.
The story in 5 lines · by baba
- Nvidia's activities are significantly boosting Israel's GDP growth figures, impacting national economic data.
- Without Nvidia's contribution, Israel's economic growth would be substantially lower, altering official statistics.
- Last year's growth was 3.5% including Nvidia, but would have been only 2.1% without it.
- International rating agency S&P bases its Israeli growth forecasts on Nvidia's overall impact.
- Concerns exist in Israel regarding potential economic repercussions from Nvidia's recent developments.
Israel's economy has become increasingly reliant on Nvidia, with national statistics and the Bank of Israel now publishing GDP growth data both with and without the company's contributions. This heightened dependence stems from Nvidia's 2019 acquisition of Israeli firm Mellanox, a move that has had a significant and unprecedented impact on the Israeli economy, particularly in the past year.
Mellanox, though registered in Israel, manufactures and sells its products internationally. Economists and international rating agencies attribute a substantial portion of Israel's export growth to Nvidia's activities related to Mellanox. This specific type of export, produced abroad but counted as Israeli, represented 1.7% of GDP in 2023, surging to 3.5% in 2025, and reaching 5.8% in the second quarter of the current year. Bank of Israel projections indicate this trend will continue through 2027.
The divergence in growth figures has become stark. Last year, overall economic growth was reported at 3.5%, but without Nvidia's contribution, it would have been only 2.1%. Analysis from Leader Capital Markets suggests that between the second quarter of 2024 and the second quarter of 2026, official growth stood at 10%, compared to an estimated 6.6% without Nvidia and similar companies. Projections for the current year show 5.6% growth, which would be 3.4% without this special export category. For next year, growth is forecast at 7.5%, or 5.1% without the foreign production.
International rating agency S&P has also acknowledged Nvidia's role in these dramatic GDP shifts, basing its own growth forecasts for Israel on the overall figures. The agency anticipates 5.5% growth by year-end and 7% next year. This economic performance influences key policy decisions, including interest rate adjustments by the Bank of Israel, regulatory changes by the Ministry of Finance, and the calculation of the government's debt-to-GDP ratio.
While the long-term effects of recent developments concerning Nvidia remain to be seen, Israel's significant exposure has led to concerns about the company's decision to dismiss its CEO, Jensen Huang.
