Israel’s economy grew by 7% in 2021, beating global average, study finds
Dun & Bradstreet says India’s economy grew by 9.5%, China’s by 8%; highlights Israeli tech sector and booming real estate industry, notes significance of widespread vaccination
Multinational business information company Dun & Bradstreet said Monday that Israel’s economy grew by seven percent in 2021, beating out a global average of 5.9%.
According to the study, India’s economy grew by 9.5% and China’s by 8%.
The Dun & Bradstreet report noted that although Israel’s economy was showing significant improvement, driven by a strong tech sector and booming real estate activity, a number of industries such as tourism, restaurants, and entertainment continued to suffer in 2021.
In addition, a shortage of raw materials and supply chain disruption as a result of the COVID-19 pandemic have negatively affected the construction and electric goods sectors as well, the report said.
The report noted the continued uncertainty surrounding the Omicron strain of the virus, but said that Israel was showing resilience so far during the pandemic, especially due to the widespread vaccine rollout.
Meanwhile, unemployment has dropped throughout the year with the lifting of various pandemic-related restrictions.
The report said that while approximately 46,000 businesses closed in Israel in 2021, around 63,000 had opened or returned to operation. The report said that as of the end of 2021, there were around 620,000 active businesses, of which around 96.5% (about 600,000) were defined as small businesses.
“The entire global economy, and the Israeli economy in particular, showed an improvement in economic and business indices in 2021, after in 2020 it, like many local economies, was significantly affected by the coronavirus crisis,” said Efrat Segev, vice president of data and analysis at Dun & Bradstreet Israel.
“The tech industry, which has significantly influenced the positive data presented by the Israeli economy, continues to be the economy’s main engine of growth, and the main task of the government and the companies in the industry will be to see how this growth can permeate into into additional strata, thus addressing both workforce growth and helping to reduce the widening gaps in the population,” Segev said.
Earlier this month, the OECD said that the Israeli economy was rebounding strongly in 2021, beating forecasts. The organization cited the country’s ongoing booster vaccination campaign, a recovering labor market, and a booming local tech sector.
“Economic activity rebounded strongly in 2021 and GDP is projected to grow robustly by 6.3% in 2021, 4.9% in 2022 and 4% in 2023,” the OECD said in its December 2021 Economic Outlook report for Israel.
Meanwhile, Israeli exports are expected to reach record highs of $135 billion to $140 billion in 2021, up 18.5% from last year, the Economy and Industry Ministry projected on Monday in a new report.
The ministry said the data was gleaned from the first three quarters of 2021. In 2020, Israeli exports reached $114 billion, preceded by $117 billion in 2019, according to ministry data.
For the first time, exports of “services” — a loose term that includes Israeli technology services like cybersecurity and artificial intelligence — appeared to be exceeding exports of goods, the ministry noted. In 2021, exports of services are set to amount to 51%, with 49% for goods.
Exports resulting from the sale of startups and companies jumped by about 257%, leading service exports to increase overall by 30%, the ministry said.
In the tech sector, exports of programming services and research and development services grew by 25% and 15%, respectively, the ministry said.
The commodities sector, meanwhile, grew by 15%, “an increase that has not been seen in recent years,” according to the report. The strongest commodities subsector was the diamond exports, which grew by 65% in 2021.
A majority of Israeli exports (not including diamonds) went to the European Union (39%), followed by the US (33%) and Asia (25%).