Israel's economy rebounds three years after October 7, 4% growth forecast, but costs and debt rise
Three years after the October 7, 2023 attacks, Israel's GDP is forecast to grow 4% in 2026, driven by tech and defence startups. Al Jazeera adds that living costs, war spending and public debt are concerns ahead of the October 27 election.
1 / 2
The story, neutrally told
Mixed · 2Israel's GDP, which shrank briefly after the October 7, 2023 attacks, is predicted to grow by 4 percent this year. France 24N “After shrinking briefly in the aftermath of the October 7, 2023 attacks, Israel's GDP is predicted to grow by 4 percent this year.” Read at France 24 ↗ Al JazeeraLC “The Bank of Israel has forecast 4 percent growth for the whole of 2026 and 5.5 percent growth in 2027” Read at Al Jazeera ↗ Left · 1According to government figures cited by Al Jazeera, GDP grew 2.9 percent in 2025, up from 1 percent in 2024, and 3.2 percent in the first half of 2026. Al JazeeraLC “Gross domestic product (GDP) grew 2.9 percent in 2025, picking up from a 1 percent expansion in 2024, and 3.2 percent in the first half of this year, according to government figures.” Read at Al Jazeera ↗ Mixed · 2The tech sector, and specifically defence startups, has played a big part in this performance; Al Jazeera says tech drives about one-fifth of economic activity and has drawn record investment amid the global AI boom. France 24N “The country's tech sector – specifically its defence startups – has played a big part in this performance” Read at France 24 ↗ Al JazeeraLC “Israel has attracted record levels of investment in tech, the driver of about one-fifth of economic activity” Read at Al Jazeera ↗
Left · 1Al Jazeera reports direct foreign investment hit a record $26.2bn last year, up 78 percent from 2024, with a quarterly record of $14.1bn in January-March 2026; the shekel hit a three-decade high against the dollar in May, the TA-125 stock index is up more than 110 percent over three years, unemployment is 2.8 percent and inflation 1.5 percent. Al JazeeraLC “Total direct foreign investment hit a record $26.2bn last year, up 78 percent from 2024”“unemployment stands at 2.8 percent, while inflation is modest at 1.5 percent.” Read at Al Jazeera ↗ Left · 1The war has been costly: the Bank of Israel estimated in March that war costs had reached about 350 billion shekels ($114.6bn), excluding the then recently launched Iran war, and put accumulated output loss through 2025 at 8.6 percent of annual GDP. Al JazeeraLC “the Bank of Israel estimated that Israel’s war costs to date had reached approximately 350 billion shekels ($114.6bn)”“accumulated loss of output through the end of 2025 equivalent to 8.6 percent of annual GDP” Read at Al Jazeera ↗ Left · 1Prime Minister Benjamin Netanyahu has pushed to raise the annual defence budget to 183 billion shekels ($60bn), roughly 9 percent of GDP, and the Bank of Israel has urged the government to restore orderly budgetary processes and credibly cut public debt, which stands at about 68 percent of GDP. Al JazeeraLC “has pushed to raise the annual defence budget to 183 billion shekels ($60bn), equivalent to roughly 9 percent of GDP.”“it was “essential” for the government to “restore orderly budgetary processes”” Read at Al Jazeera ↗
Left · 1Cost of living is a public concern: Lobby 99 says food prices rose 8 percent between early 2024 and mid-2026, and an Israel Democracy Institute poll found 38 percent of Jewish Israelis and 46 percent of Palestinian citizens of Israel ranked the economy and cost of living as a top-two election issue, though security dominates the campaign for the October 27 Knesset election. Al JazeeraLC “food prices have risen at a faster pace, increasing 8 percent between the start of 2024 and mid-2026, according to consumer advocacy group Lobby 99.”“campaigning for the October 27 election has been dominated by national security” Read at Al Jazeera ↗ Left · 1Economists quoted by Al Jazeera differ in emphasis: the EIU's Keren Uziyel calls the rebound export-driven, while Hebrew University's Joseph Zeira says performance has been "not been great at all" relative to the pre-conflict trend; all say prospects depend on whether regional conflict escalates. Al JazeeraLC ““export-driven story that reflects strong global technology demand”“has “not been great at all”” Read at Al Jazeera ↗ Centre · 1France 24 notes demographic challenges ahead and that destruction in Gaza has cut GDP per capita there by 83 percent, with reconstruction plans yet to begin. France 24N “the destruction caused by Israel's war in Gaza has reduced GDP per capita in the Palestinian enclave by 83 percent and reconstruction plans there have yet to begin.” Read at France 24 ↗
Every sentence links to the reporting it rests on. The pill in front of each says where its sources sit: Left, Centre or Right when one side supplies at least half of them, Mixed when they are evenly split. The number is how many outlets it cites.
Left1 outlet
- Framing
- Al Jazeera presents a resilient, tech-led economy but stresses costs: war spending, debt, food prices and voter worries ahead of the election.
- Emphasis
- Fiscal strain, cost of living, caveats to headline figures, economist quotes.
- Leaves out or plays down
- Little on Gaza's economic state beyond the war's description.
- Charged language
- “Israel’s genocidal war on Gaza”
- For example
-
“Israel’s economy prospers despite years of war, but prices worry voters” — Al Jazeera
“While Israel’s headline economic figures are impressive, they come with caveats attached.” — Al Jazeera
Centre1 outlet
- Framing
- France 24 leads with Israel's economic strength and the role of defence tech, noting demographic challenges and contrasting Gaza's collapse.
- Emphasis
- Growth forecast, tech and defence startups, Gaza GDP per capita fall.
- Leaves out or plays down
- Few details on debt, living costs or the election.
- Charged language
- “shows its strength”
Right0 outlets
No right outlet in our sources has covered this story yet.
What every side reports
- Israel's GDP is forecast to grow 4 percent in 2026.
- The tech sector, including defence-linked firms, is a key driver of growth.
Where accounts differ
-
How the economy's performance should be characterised
- Left
- Impressive headline figures but with caveats: high war costs, rising debt, food prices and lagging the pre-conflict trend.
- Centre
- The economy shows its strength, with demographic challenges on the horizon.
Left1 article
-
Israel’s economy prospers despite years of war, but prices worry voters
Mixed Detailed analysis of strong macro figures qualified by fiscal, price and conflict risks.
Centre1 article
-
Three years after October 7 attacks, Israel's economy shows its strength
Neutral Short summary of the economy's strength with a note on Gaza's devastation.
Right0 articles
No coverage yet.
- 7 Oct 13:30 First France 24N Three years after October 7 attacks, Israel's economy shows its strength
- 10 Oct 06:28 +64h 58m Al JazeeraLC Israel’s economy prospers despite years of war, but prices worry voters
Times are when each article was published, or when we first saw it if the outlet gave no time.