Israel’s economy is technology-intensive and globally integrated. Defense, AI, cybersecurity, and health tech dominate exports. Natural gas discoveries improved energy self-reliance. Political volatility and societal division influence reform, judicial independence, and fiscal policy debates.

Established in 1948, Israel absorbed successive immigration waves and fought multiple wars with neighbors. Economic liberalization since the 1980s spawned a start-up ecosystem supported by research spending (5% of GDP). Peace treaties with Egypt and Jordan created secure borders south and east, but the Palestinian question remains unresolved. Strategic focus shifts between regional deterrence and domestic institutional balance.

• 1948: Declaration of independence and Arab-Israeli War – 1967: Six-Day War; territorial expansion – 1979: Peace treaty with Egypt – 1993: Oslo Accords create Palestinian Authority – 2020s: Abraham Accords normalize relations with Gulf states; internal political fragmentation

Israel pursues missile-defense upgrades (Iron Beam), expands Mediterranean gas exports, and strengthens partnerships with UAE and India. Judicial reform debates test institutional checks while AI and quantum research receive state priority.

Medium-term growth stable around 3%; innovation and gas exports support external balances. Risks: regional conflict escalation with Iran-Hezbollah, civil unrest, and global tech cycle downturns.