Israel's economy booms on tech investment but voters wince at prices

On 10 October 2026 Al Jazeera analysed how Israel's economy was prospering despite years of war but prices had become a dominant voter concern. GDP grew 2.9% in 2025, after only 1% in 2024, and expanded 3.2% in the first half of 2026, with the Bank of Israel forecasting 4% growth for the full year and 5.5% in 2027 - well above projections for the US, UK, France, Canada and Japan. Unemployment stood at 2.8% and inflation at 1.5%, the shekel hit a three-decade high in May and the TA-125 stock index was more than 110% up. Foreign direct investment reached a record $26.2bn in 2025, up 78% from 2024, with $14.1bn arriving in the first quarter of 2026 alone, led by the tech sector. But war costs since October 2023 totalled around 350 billion shekels ($114.6bn), the proposed defence budget was 183 billion shekels, debt-to-GDP climbed to about 68%, and food prices rose 8% between 2024 and mid-2026. Polls cited by economists Keren Uziyel, Joseph Zeira, Ayal Kimhi and Omer Moav showed 38% of Jewish Israelis naming the economy as their top election concern.