Israel’s economy and financial markets are booming — even as conflict rages in the Middle East

israel's economy is growing at a pace that beats most developed nations, even after nearly three years of sustained conflict. the bank of israel cut its 2026 growth forecast by 1.4 percentage points earlier this month, but still expects 3.8% growth. governor amir yaron told cnbc on april 16 that if regional conflicts are resolved, growth could hit 5.5% next year. the imf sees israel growing 3.5% this year, versus 2.3% for the us and 1.3% for the eu. israel's gdp is forecast to outperform all g7 countries in 2026. its debt-to-gdp ratio sits at 69.8% — far below the g7's 123.7%. unemployment was 3.2% in march, lower than america's 4.3% and the euro zone's 6.2%. inflation held at 1.9% in march, within the 1-3% target range. the tel aviv 35 index is up about 20% since january, building on a 51.6% rally in 2025. the shekel has gained nearly 7% against the dollar this year. keren uziyel at the economist intelligence unit pointed to two record foreign investment deals completed in march 2026: google's $32 billion purchase of wiz and palo alto networks' $25 billion purchase of cyberark. she also noted population growth averaging close to 2% a year, with a relatively youthful demographic by developed-world standards.