Despite War: Israel’s Economy in Excellent Shape. But Poverty explodes.

The surprise of the week was undoubtedly the ranking of countries in terms of economy by the magazine ‘The Economist‘.

‘The Economist’ asked which country did best economically in 2024. Left-wing, woke media in Israel were outraged about the awesome performance of Israel’s economy and tried to find fault. We’ll ignore them.

The fact is that ‘The Economist’ sees Israel in sixth place. ‘The Economist’ sees Spain as the number one, followed by Greece, Italy, Ireland, Denmark and finally Israel.

Five factors were evaluated: growth rate, stock market performance, inflation, unemployment, and the fiscal deficit.

Israel scored extremely well in those macro factors. For example, the unemployment rate is currently at 2.8% and the TASE 125 stock index even outperformed the S&P 500 stock index.

‘The Economist’ calculates economic growth from 4/2023 to 3/2024. Again Israel achieved impressive growth of around 6.7%.

This results in a strong shekel, which somewhat dampens inflation. However, the cheaper purchase prices do not reach the consumer. On the contrary, many Israeli companies are making extra profits and companies in a de facto monopoly position are enjoying record profits at the expense of consumers.

Of course, there are some indicators where Israel needs to improve significantly, such as the world’s highest cost of living in relation to income. The cost of living in Israel is around 40% above the OECD average. According to Yahoo Finance, milk, bread, and cheese are 50% to 70% more expensive in Israel than other OECD members.
The average income/year in Israel for 2024 is roughly about 43.000 USD. The average income/year in the OECD is roughly about 53.000 USD (2023). But the average prices for food etc are about 40% above the average price level of the OECD. In Israel, citizens earn less than the OECD average (roughly -20%) but pay more than the OECD average (approximately +40%). We can’t proceed that way. The de facto monopolies (of import and resale) must be immediately abolished with hard and tough hand. I never noticed that the unelected elites of the deep state went against those unconstitutional monopolies. Monopolies are always a danger to democracy and one of the main causes of poverty.

Finally, investor confidence returned. In the third quarter of 2023, foreign investors invested around $11.5 billion in Israel’s economy. A remarkable three-year high.

However, the current tax reform must be viewed critically. It disadvantages investment capital, especially that of the “small man”, but encourages speculation in the real estate industry.

In summary, Israel has a robust economy, but most Israelis do not benefit.