Despite a high -tension geopolitical context, the Israeli economy has spectacular results on the financial markets. Carried out by a solid banking sector, a booming defense industry and a resilient technological ecosystem, Israel surprises investors around the world. Decryption.
WhileIsrael has been engaged in a conflict for almost two years, the Tel Aviv Stock Exchange has experienced an unprecedented dynamic. The TA-125 index has reached a historic record of 3138 points, with an increase of 22 % since the start of the year. The Shekel, the national currency, has also experienced a remarkable performance, its best for more than twenty years. A surge that contrasts clearly with the prudence observed on European or American financial centers. According to Bloomberg, Tel Aviv displays a relative serenity, proof that investors show unexpected confidence in the Israeli economy.
Banks, defense and technology in working order
Three major sectors partly explain this dynamic. First, the banking sector. The five main Israeli banks see their shares leap by 30 %, boosted by high interest rates around 4.5 %, which boost their margins and attract investors in search of high dividends. Bank Hapoalim, for example, has just announced a record profit of 2.7 billion shekels. Then, the defense industry experienced dazzling growth, with an increase of 130 % in one year. Israeli armaments exports break records, and recent conflicts have served as a showcase for proven technological systems, such as anti-missile shields that have intercepted almost all of Iranian attacks. Finally, the technological sector remains one of the engines of the Israeli economy. Just in the first six months of 2025, the “start-up nation Raised $ 9.3 billion, an increase of 54 % compared to the previous semester. Artificial intelligenceCybersecurity: Israeli innovations, often tested in real conditions, attract international investors.
Resilience based on diversification and habit of crises
Beyond the figures, the performance of the Israeli economy is also explained by structural resilience. Local investors, accustomed to geopolitical tensions for decades, continue to bet in the long term, convinced that shocks are temporary and that economic fundamentals remain solid. The Israeli economy has also diversified. If technology remains a pillar, the banking, defense, insurance and real estate sectors also contribute to growth. Finally, paradoxically, the conflicting context has strengthened the country’s strategic position. The destruction of Iranian nuclear capacities and the weakening of hostile groups have, in the eyes of investors, made Israel more stable and more attractive.
