Israel ranked 4th-best-performing economy among OECD countries in 2022
The Economist says country did well despite political upheaval; exports to grow to record high of over $160b this year, with services, including tech, outpacing goods for 2nd year
Israel is the fourth-best-performing economy in 2022 among a list of OECD countries, according to a ranking compiled by The Economist.
The British weekly cited Israel’s well-performing economy as one of the “pleasant surprises” in 2022 “despite political chaos” wrought by the government’s collapse, which took Israelis to the polls for a fifth time in less than four years.
The Economist’s ranking is based on an overall score measured by five economic and financial indicators: gross domestic debt (GDP), inflation, inflation breadth, stock market performance and government debt.
Israel’s economy shared the fourth place with Spain and was ranked after Ireland among the 34 wealthy OECD countries cited in the survey. Greece scored the top spot followed by Portugal in second place, while Latvia and Estonia came at the bottom of the list. Japan, France, and Italy made it into the top 10. Meanwhile, the US economy, which grew at a rate of 0.2%, ranked 20th, and Germany, “despite poitical stability,” is in 30th place, according to the Economist.
Countries, including Spain and Israel, that are not dependent on oil and gas delivery from Russia fared better than average, the survey found.
“Those reliant on Vladimir Putin for fuel have truly suffered,” the Economist noted. “In Latvia average consumer prices have risen by a fifth.”
Israel’s economy is projected to have grown at a rate of 6.3% in 2022, according to Finance Ministry estimates, following its even faster expansion of 8.1% in 2021, the year of recovery from the COVID-19 pandemic. That compares with projected GDP growth of 3% among world economies for this year, according to an OECD outlook.
Israeli exports, which comprise about 30% of the country’s economic activity, are expected to have increased by more than 10% to record highs of between $160 billion and $165 billion in 2022, according to a conservative estimate published on Sunday by the Economy Ministry’s Foreign Trade Administration (FTA).
The exports of services, including Israeli technology services such as software and various research and development (R&D) solutions, likely exceeded exports of goods for the second consecutive year, with 51% for services and 49% for goods. Programming and R&D services continue to lead the list of the most exported services, with 42% and 14%, respectively, the FTA stated in the report.
Europe is Israel’s largest trading partner, accounting for 38% of exports, followed by the Americas at 35% and Asia at 24%.
Inflation in Israel for the last 12 months has climbed above the upper limit of the target range of 1% to 3% and stands at 5.3%, though it is significantly lower than in most developed countries.
Looking ahead to 2023, the Finance Ministry earlier this month cut its growth outlook for the country’s economy from 3.5% to 3%, citing a contraction in consumer spending and a slowdown in the global economy, which is expected to grow at a rate of about 2.2%.