Despite the war: Israel enters the top 25 largest economies in the world

Israel has risen to 25th place in the IMF ranking of the world's largest economies, improving its position by two spots. The country's GDP in 2026 is projected at $747 billion, 21% higher than last year's figure. The growth is attributed to real economic expansion, the strengthening of the shekel, and the relative nature of the ranking.

Despite the prolonged war, Israel has risen to 25th place in the IMF ranking of the world's largest economies, improving its position by two spots compared to last year. According to the forecast published on November 13, Israel's GDP in 2026 will reach $747 billion, 21% higher than last year's $617 billion. By this measure, Israel surpasses Sweden, Ireland, Singapore, and the UAE. GDP per capita is estimated at $72,400, placing the country among the leaders of OECD nations. The rise in the ranking is explained by three factors: real economic growth (the IMF forecasts 4.5% growth in 2026, mainly driven by high-tech and defense industries), the strengthening of the shekel against the dollar (by 6.7% in 2025 and 5.9% in the second quarter of 2026), and the relative nature of the ranking, where Israel's position also depends on the performance of competitor countries. At the same time, the article notes the difference between a large and a strong economy: nominal GDP does not reflect the standard of living, social inequality, or the state of the government budget. The IMF forecasts a budget deficit of 5.8% of GDP and a government debt of 68.8% of GDP. The economy faces labor shortages, a productivity gap, and high defense spending. The Bank of Israel indicated that part of the GDP growth is driven by the activities of Israeli companies abroad, which does not necessarily reflect an expansion of employment and production within the country.