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The Kibbutzim, collective communities in Israel traditionally based on agriculture, played an important role in Israel's economy until the late 1970s. In 2017, 2.4% of the country's GDP is derived from agriculture.
Feb 19, 2024 · Before the war broke out, Israel’s economy was on a relatively solid footing, logging growth of 6.5% in 2022. The government debt-to-GDP ratio had fallen to 61% — from 71% during the pandemic —...
- Overview
- Economy of Israel
- Agriculture, forestry, and fishing
The large influx of well-trained and Western-educated European and North American immigrants contributed greatly to a rapid rise in Israel’s gross national product (GNP) after 1948. Although most of them had to change occupations, a nucleus of highly skilled labour, in combination with the country’s rapid founding of universities and research institutes, facilitated economic expansion. The country obtained large amounts of capital, which included gifts from Jews around the world, reparations from the Federal Republic of Germany for Nazi crimes, grants-in-aid from the U.S. government, and capital brought in by immigrants. Israel has supplemented these forms of revenue with loans, commercial credits, and foreign investment.
The goals of Israel’s economic policy are continued growth and the further integration of the country’s economy into world markets. Israel has made progress toward these goals under difficult conditions, such as a rapid population increase, a boycott by most Arab countries, heavy expenditure on defense, a scarcity of natural resources, high rates of inflation, and a small domestic market that limits the economic savings of mass production. Despite these obstacles, Israel has achieved a high standard of living for most of its residents, the growth of substantial industrial export and tourism sectors, and world-class excellence in advanced technologies and science-based industry. However, this economic progress has not been uniform. Israeli Arabs are generally at the lower rungs of the economic ladder, and there are substantial economic divisions among Israeli Jews, mainly between the Sephardim and Ashkenazim.
Large influxes of capital have passed through government channels and public organizations and enlarged that sector of the economy that engages in enterprises between the government and private concerns. Government policy dating from the late 1970s, however, has been directed toward privatization. The private, governmental, and, to a limited extent, cooperative sectors all coexist in an economy that supports both the broad objectives of state policy and individual enterprise.
Tax rates in Israel are among the highest in the world, with income, value-added, customs and excise, land, and luxury taxes being the main sources of revenue. The government has gradually raised the proportion of indirect taxes since the late 1950s. Tax reforms in 1985 included a new corporate tax levied on previously untaxed business sectors while slightly reducing direct taxes on individuals. Taxation approaches two-fifths of the value of GNP and is about one-fourth of average household income.
The large influx of well-trained and Western-educated European and North American immigrants contributed greatly to a rapid rise in Israel’s gross national product (GNP) after 1948. Although most of them had to change occupations, a nucleus of highly skilled labour, in combination with the country’s rapid founding of universities and research institutes, facilitated economic expansion. The country obtained large amounts of capital, which included gifts from Jews around the world, reparations from the Federal Republic of Germany for Nazi crimes, grants-in-aid from the U.S. government, and capital brought in by immigrants. Israel has supplemented these forms of revenue with loans, commercial credits, and foreign investment.
The goals of Israel’s economic policy are continued growth and the further integration of the country’s economy into world markets. Israel has made progress toward these goals under difficult conditions, such as a rapid population increase, a boycott by most Arab countries, heavy expenditure on defense, a scarcity of natural resources, high rates of inflation, and a small domestic market that limits the economic savings of mass production. Despite these obstacles, Israel has achieved a high standard of living for most of its residents, the growth of substantial industrial export and tourism sectors, and world-class excellence in advanced technologies and science-based industry. However, this economic progress has not been uniform. Israeli Arabs are generally at the lower rungs of the economic ladder, and there are substantial economic divisions among Israeli Jews, mainly between the Sephardim and Ashkenazim.
Large influxes of capital have passed through government channels and public organizations and enlarged that sector of the economy that engages in enterprises between the government and private concerns. Government policy dating from the late 1970s, however, has been directed toward privatization. The private, governmental, and, to a limited extent, cooperative sectors all coexist in an economy that supports both the broad objectives of state policy and individual enterprise.
Tax rates in Israel are among the highest in the world, with income, value-added, customs and excise, land, and luxury taxes being the main sources of revenue. The government has gradually raised the proportion of indirect taxes since the late 1950s. Tax reforms in 1985 included a new corporate tax levied on previously untaxed business sectors while slightly reducing direct taxes on individuals. Taxation approaches two-fifths of the value of GNP and is about one-fourth of average household income.
Early Israeli society was strongly committed to expanding and intensifying agriculture. As a result, a rural Jewish agrarian sector emerged that included two unique forms of farming communities, the kibbutz and the moshav. Although the rural sector makes up less than one-tenth of the total Jewish population, such a large rural populace represents something almost unknown in the Diaspora.
The amount of irrigated land has increased dramatically and, along with extensive farm mechanization, has been a major factor in raising the value of Israel’s agricultural production. These improvements have contributed to a great expansion in cultivating citrus and such industrial crops as peanuts (groundnuts), sugar beets, and cotton, as well as vegetables and flowers. Dairying has also increased considerably in importance. Israel produces the major portion of its food supply and must import the remainder.
The main problem facing agriculture is the scarcity of water. Water is diverted through pipelines from the Jordan and Yarqon rivers and from Lake Tiberias to arid areas in the south. Because almost all the country’s current water resources have been fully exploited, further agricultural development involves increasing yields from land already irrigated, obtaining more water by cloud seeding, reducing the amount of evaporation, desalinizing seawater, and expanding desert farming in the Negev by drawing on brackish water found underground. Israel has perfected drip-irrigation methods that conserve water and optimize fertilizer use.
Only a limited quantity of fish is available off Israel’s Mediterranean and Red Sea coasts, and Israeli trawlers sail to the rich fishing grounds in the Indian Ocean and engage in deep-sea fishing in the Atlantic Ocean. Inland, fishpond production meets much of the domestic demand.
Mar 7, 2024 · In the final quarter of 2023, Israel’s gross domestic product (GDP) – a measure of a country’s economic health – shrank by almost 20%. Consumption dropped by 27% and investment by 70%.
Feb 16, 2022 · Israel's economy grew at its fastest pace in 21 years in 2021 as consumer spending, exports and investment rebounded with double-digit gains following a pandemic-stifled 2020, raising the spectre...
Feb 19, 2024 · Israel’s economy shrank almost 20 per cent in annualised terms in the final quarter of 2023, official data showed, as it poured resources into its conflict against Hamas in Gaza.
Dec 21, 2023 · Israel is an OECD member country with a developed free-market economy. The most important economic sectors are technology, manufacturing, and diamond polishing and cutting. In 2022, Israel's...
