According to a ranking compiled by The Economist, Israel is the fourth-best performing economy among a list of OECD countries in 2022.
The British weekly cited Israel’s well-functioning economy as one of the “pleasant surprises” of 2022 “despite the political chaos” caused by the government collapse that sent Israelis to the polls for the fifth time in less than four years.
The Economist’s ranking is based on an aggregate score measured against five economic and financial indicators: gross domestic debt (GDP), inflation, inflation breadth, stock market performance and government debt.
Israel’s economy shared fourth place with Spain and ranked after Ireland among the 34 prosperous OECD countries named in the survey. Greece took first place, followed by Portugal in second place, while Latvia and Estonia were at the bottom of the list. Japan, France and Italy made it into the top 10. The US economy grew at a rate of 0.2% at number 20 and Germany “despite political stability” at number 30, according to The Economist.
Countries that are not dependent on oil and gas supplies from Russia, including Spain and Israel, outperformed, according to the survey.
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“Those who depend on Vladimir Putin for fuel have really suffered,” noted the Economist. “In Latvia, average consumer prices have increased by a fifth.”
The port in Haifa with anchor ships, cranes and cargo containers. (MagioreStock via iStock by Getty Images)
According to Treasury Ministry estimates, Israel’s economy is expected to have grown by 6.3% in 2022, after growing even faster by 8.1% in 2021, the year of recovery from the COVID-19 pandemic. This compares to projected GDP growth of 3% for global economies this year according to an OECD forecast.
Israeli exports, which account for about 30% of the country’s economic activity, are expected to have risen more than 10% to record highs of between $160 billion and $165 billion in 2022, according to a conservative estimate released Sunday by the Commerce Department’s Foreign Ministry Trade Administration (FTA).
Exports of services, including Israeli technology services such as software and various research and development (R&D) solutions, outpaced goods exports for probably the second year in a row, with 51% for services and 49% for goods. Programming and R&D services continue to top the list of top-exported services, at 42% and 14%, respectively, the FTA notes in the report.
Europe is Israel’s largest trading partner with 38% of exports, followed by America with 35% and Asia with 24%.
Inflation in Israel has climbed above the upper limit of the 1% to 3% target range over the past 12 months and stands at 5.3%, although it is significantly lower than in most developed countries.
Looking ahead to 2023, the Treasury Department earlier this month cut its growth outlook for the country’s economy to 3% from 3.5%, citing a fall in consumer spending and a slowdown in the global economy, which is expected to grow at a rate of around 2 .2%.
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