Israel is an OECD member country with a developed free-market economy. The most important economic sectors are technology, manufacturing, and diamond polishing and cutting. In 2022,
amounted to 501.4 billion U.S. dollars, and, according to estimates, it will increase to 611.8 billion U.S. dollars by 2026. Based on economic evaluations,
by 6.13 percent in 2022, and it will continue to expand in the following four years, albeit at a lower rate. There is a high probability that economic growth in Israel will be higher than the
Stable labor market
The labor market in Israel is relatively stable and supports the economic upturn. Estimates showed that the number of employed people rose to 4.1 million people in 2022, a slight increase compared to the previous year. In contrast, in 2020, there was a moderate decline in the
number of employed people, probably due to restrictions imposed by the government on many sectors following the coronavirus (COVID-19) outbreak. In addition, since 2016, the
unemployment rate in Israel has remained stable around five percent.
High-tech and manufacturing at the forefront
High-tech and manufacturing have been Israel's most important economic industries in recent years. In 2020, the
export value of manufactured industrial products amounted to 44.8 billion U.S. dollars, making them the most exported commodities from Israel. In addition, in 2021, nearly 386,000 people worked in the Israeli high-tech sector. They were employed in
diverse industries, mainly computer programming and consultancy. The innovative approach of Israel has contributed to the success of this sector. Moreover, it has also encouraged the establishment of tech startups, which mainly
operate in Tel Aviv and Jerusalem.
Importance of international trade
Foreign trade plays an essential role in the economic growth of Israel. The most important trade partner - for both imports and exports - is the European Union (EU), which signed a free trade agreement with Israel in 2004. In 2021,
exports from Israel to the EU reached a value of nearly 13.34 billion U.S. dollars. In addition, Israel has strong trade ties with the United States. From the United States, Israel imports a variety of goods which are essential for the prosperity of crucial industries in Israel, such as electronics. In 2021,
imports from the United States accumulated a value of 7.9 billion U.S. dollars.
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