by Dr. Guy Bechor, translated and adapted by Hillel Fendel
-- Israel is doing astonishingly well in comparison with other top industrial countries --
It's now been 15 years that we have been following, tracking and analyzing the forecasts of the British "Economist," with a special eye on Israel's economy. The results have often been surprisingly impressive, but the forecast for Israel for this coming year has broken all records. Israel's economy is amazingly positioned for 2022, in comparison with the United States, the European Union, and Arab countries.
In this great economic year of 2021, Israel saw a formidable jump in its Gross Domestic Product from under $400 billion to $462 billion! The Economist now forecasts that Israel will reach the half-trillion level in 2022. This means no less than $51,120 per capita, up very nicely from the levels of the outgoing year.
And keep in mind that the Economist often underrates Israel's performance. Last year, for instance, it predicted that Israel's GDP per capita would rise by 2.5%, when it actually leaped by 7.1%! For 2022, the Economist foresees a jump of 4.2%, but it could even be higher; see below.
Some 20 years ago, Israel's GDP per capita was only about $15,000 – which means that in the two decades since then, Israel's economy has jumped 3.5-fold. In simple terms, Israel went from being a poor country to a rich one. It must be added, however, that living in Israel is not inexpensive; we are on the level of Norway and Switzerland, as indicated by these countries' PPP (Purchasing Power Parity, or the per capita GDF adapted to purchasing power).
Israel's economic strength is evident in the strength of the shekel, arguably the strongest currency in the world. A year ago, a shekel was worth under 30 cents, while it is now rated at 32 and a quarter cents. The reasons for Israel's strong economic performance are as follows:
1. Israel's hi-tech. Precisely during this Corona period, when the world was largely in quarantine, Israel was able to export its much-needed and rapidly advancing hi-tech systems and products around the world. For instance, so far during 2021, 86 Israeli companies have been sold for a cumulative value of $10 billion. Compare this to 67 sales for $7.7 billion in 2019, pre-Corona, and 52 deals for $4 billion in 2018. During the Corona year of 2020, 41 companies were sold for a total of $6.1 billion.
Tremendous sums of money also stream in via Israeli issues on stock markets around the world. Israeli hi-tech companies raised some $11 billion in 2021 in 20 Wall Street issues, and a total of $40 billion all together. Twenty-eight new "unicorns" (start-ups worth at least $1 billion) have been formed, second only to the United States. The high amounts of foreign currency streaming into Israel have enabled the shekel to retain its high level.
2. Aliyah and Jewish investment. Jews in the West have finally begun to absorb that they have no future there. The smart ones among them are already streaming in large sums so that they can buy real estate here. For many of them, this is in preparation for their Aliyah, while others have already come home to Israel.
In recent years, it was French Aliyah that made the most news, but now we're talking about high numbers of Jews from the U.S. and Britain who are selling their homes in order to buy new ones here. Real estate prices have been rising, and will continue to do so; we have long been alerting our readers that real estate in Israel will continue to rise, and that as a general rule, no one has lost out by purchasing property in Israel.
3. Gas. Israel's gas deposits have begun bringing in large sums to the national coffers, and are enriching Israel. Israel is no longer "poor," but is rather an energy-state whose wealth continues to grow. Israel sells gas to Egypt and Jordan, and just a few days ago a contract was signed further increasing the amounts purchased by Egypt. Soon the Leviathan gas field will join the Tamar gas field – both off Israel's Mediterranean coastline – and Israeli royalties and income will grow even more. Israel's international rating as an energy-producing company will increase our already-high credit rating, meaning that we will pay lower interest rates on our loans. And it appears that there is yet more gas to be found off Israel's shores.
4. Weapons and technology. Sales of Israeli military technology and weapons continue to break records, growing from $12 billion annually several years ago to close to $20 billion. Everyone seems to want Israel's top-quality, sophisticated and battle-tested products. The sky's the limit in this field, because every country is either preparing for war or establishing an army, and Israel is a trusted, democratic and admired seller – even when prices rise. And thus our enemies enrich us and further weaken themselves.
If we compare Israel with Europe's three leading economies – Germany, Britain, and France – we see clearly how Israel's position is constantly improving. We are ahead of France and England in terms of per capita productivity, with France holding at $46,170 and Britain at $50,590, and are nearing the Germans' level of $53,200. Germany's economic stats are worsening, and we should be able to pass it very soon.
There is no doubt that this past economic decade, known as the Netanyahu Decade, was Israel's best ever. The current government, so far, is continuing the same approach, encouraging growth and relatively low taxation.
What about the Arab nations? It must be stated clearly: The Arab countries around us are no longer relevant in terms of Israel, and their economic data continue to be in the gutter. The only one of them with a reasonable GDP per capita is Saudi Arabia, at $22,780 – way less than half that of Israel. Lebanon's economy has collapsed to only $4,560, while Jordan, Iraq and Egypt, though above $4,000, are still lower than that. The other Arab countries in our vicinity are doing even worse. They have no growth levers, but do feature high rates of despair and emigration. Israel today economically supports Jordan, Gaza, and the PA terror entity in Ramallah.
Now get this: The day will soon come when Israel will offer to buy areas in northern Sinai from Egypt and tracts of land in southern Syria – and Egypt and Syria will agree to sell.
Ed. note: The year of Corona, 2020, was Israel's worst year ever, showing a 2.6% drop in GDP compared to the year before. But that in itself proves Israel's strength, for other national economies did much worse! The U.S. economy dropped that year by 3.5%, Germany by 5%, and France, Italy, Britain and Spain by between 8 and 11%.