The most important parameter for comparing Israel’s economy to global markets is its growth forecast. While historical data can be analyzed endlessly, past figures alone do not provide a clear picture of Israel’s economic potential in the years ahead. Growth projections, however, do—especially considering that, according to the Bank of Israel, the Israeli economy is expected to grow at twice the rate of other developed economies.
The International Monetary Fund (IMF) has published its global growth forecast, predicting that the world economy will expand by 3.3% in both 2025 and 2026. Developed economies are expected to grow at a rate of around 1.8% over the next two years, while emerging markets are projected to grow at approximately 4.2%. And what about Israel, which is classified as a developed economy? Here, the numbers are striking: according to the Bank of Israel, the country is expected to see 4% growth in 2025, followed by 4.5% in 2026. These are remarkable growth figures, especially since they far exceed the average growth rate of other developed nations.
Beyond these positive projections, Israel’s unemployment data is also highly encouraging. As of the first quarter of 2025, unemployment figures are so low that they effectively indicate full employment. Even during the "Iron Swords" war, unemployment remained minimal. The employment rate among young people (under 25) is particularly promising, especially in comparison to other developed countries, where more than 10% of young people are unemployed.
The Bank of Israel’s growth forecast paints a highly optimistic picture of the country’s economy. It reinforces the notion that investing in Israel—a developed country with an emerging-market growth rate—is a safe bet in a strong and stable economy. Of course, one could also invest in a developing nation like Vietnam, which has an attractive
growth outlook. However, the risk level in such markets is significantly higher than in Israel—a developed, resilient country that demonstrated exceptional economic stability even amid last year’s security uncertainties.