Israel's War Economy: Resilience and U.S. Aid
The Israeli economy has demonstrated remarkable resilience in the face of the ongoing war in Gaza, Lebanon, and Iran, managing to avoid a financial collapse despite continuous military challenges. The shekel's value has risen by nearly 30% against the dollar, and the technology, defense, and energy sectors have secured major deals. Meanwhile, unemployment rates remain low, and economic growth is expected to reach 3.5% in 2026 according to the International Monetary Fund. However, the bumpy performance reveals that this resilience largely depends on significant external support, such as U.S. aid, and is accompanied by increasing public debt and a slowdown in core growth. This highlights that, despite its flexibility, the Israeli economy faces long-term challenges due to the ongoing conflict.
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