Israel's economy is expanding rapidly despite years of war, but rising food costs and growing debt are raising concerns among voters ahead of elections.
Israel's economy has rebounded strongly after initial setbacks from the Hamas-led attacks in October 2023 and the subsequent war in Gaza. GDP growth reached 2.9 percent in 2025, with projections of 4 percent for 2026 and 5.5 percent for 2027, outpacing major global economies. The shekel has strengthened against the US dollar, and the stock market has surged by over 110 percent.
Despite these gains, rising food costs and increasing debt are causing unease among voters. Unemployment remains low at 2.8 percent, and inflation is modest at 1.5 percent. The tech sector, largely unaffected by the ongoing conflicts, has been a key driver of economic resilience.
Why it matters
Rising food costs and debt threaten voter confidence in an economy otherwise performing well.
This section reflects Dumpling editorial interpretation and is provided for context only.
What to watch
Election campaigning will focus on how candidates address economic concerns alongside national security.
This section reflects Dumpling editorial interpretation and is provided for context only.