Israel is a small country. 50% of the territory is arid. On at least two of its borders, it suffers from constant violent infiltrations. And its existence is threatened by the nuclear aspirations of Iran.

So why of why is the economy booming? Look at the stats.

• Israel is likely to record a 7% growth rate in 2021, despite fighting a three week war with Gaza.
• The mark up for 2022 is estimated at a further 5%.
• The Israeli shekel is one of the best performing currencies in the world at the moment, a strength that is helping to lower inflationary expectations.
• Unemployment is now below 6% and still falling.

This week, it was announced that “Israel’s high-tech sector raised a record $25.4 billion so far in 2021, up 136% over 2020″. That is nothing short of outstanding.

Start-up whizz and commentator, Hillel Fuld, put this number into perspective with a comment on his LinkedIn page:

This year was the first time that the number of Israeli IPOs surpassed the number of exits. Meaning, more companies went public than were acquired. That is a very important metric. It means that we are no longer “Startup Nation”. The aggregate value of Israeli companies traded on Wall Street is $300 billion. Three hundred billion!!

Clearly much of the good news is a result of the bounce back from the depth of the corona period. I suspect that an element can be traced (somehow) to the end for now of political instability that saw four general elections in 24 months, as well as an unwanted rhetoric voiced by some politicians. On all this was achieved at a time when the previously vital tourism industry imploded!

It would be interesting to speculate what would have happened if government had been more involved, passing more laws, interfering in the cause of helping. We will never know of course, but there is a message here for the fiscal and monetary planners sitting at their desks in Jerusalem.