Israel’s economy prospers despite years of war, but prices worry voters

After three years of Israel’s multi-front war in the Middle East, it would be no surprise if this month’s Knesset elections were taking place against the backdrop of an economy in dire straits. Instead, Israel’s economy is – by many measures – flourishing. After slowing sharply in the initial aftermath of the Hamas-led October 7, 2023 attacks and Israel’s genocidal war on Gaza, Israel has rebounded to become one of the fastest-growing advanced economies in recent years. 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. The Bank of Israel has forecast 4 percent growth for the whole of 2026 and 5.