Israel Faces Economic Shock And High-Tech Rebound

In late 2023 through 2025, Israel's economy contracted after the October 7 Hamas attack, with GDP down 19.4% in Q4 2023 and annual growth at 1.8% in 2023, while war costs were estimated at $80 billion through 2025 and debt rose to 69% of GDP. Despite credit downgrades and over $48 billion in capital flight, the high-tech sector—led by cybersecurity, AI, Nvidia, and Intel—helped spur recovery with $15.6 billion in startup funding and $60 billion in M&A in 2025.