Despite the war – the Israeli economy on its way to a new record

Despite the ongoing war, the Israeli economy is expected to climb to 25th place in the ranking of the world's largest economies, with a GDP of about $747 billion. S&P has raised its growth forecast to 7% for next year, but left the credit rating unchanged due to geopolitical risks.

Despite the ongoing war, the Israeli economy is expected to reach a new peak in the global ranking. According to a forecast by the International Monetary Fund (IMF) published today (Wednesday), Israel will climb to 25th place among the world's largest economies, up from 27th place last year. The gross domestic product is expected to reach about $747 billion, a jump of about 21% compared to $617 billion in 2025. This would allow Israel to overtake economies such as Sweden, Ireland, Singapore, and the United Arab Emirates. Meanwhile, credit rating agency S&P has raised its growth forecast to 5.5% this year and 7% in 2027. However, the agency left the credit rating unchanged due to geopolitical risks, primarily the confrontation with Iran and its proxies, which subtracts two notches from the credit assessment. One of the significant drivers of growth is Nvidia's activity in Israel, which operates local development centers that contribute to GDP figures. The article notes that part of the dollar-denominated jump stems from the strengthening of the shekel against the dollar, and does not reflect real growth at a similar rate.