January 27, 2023

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Israel Becomes 4th Best-Performing Economy in OECD Countries this Year

2 min read

The Economist recently put together the list of best-performing OECD countries in 2022 and Israel was ranked fourth amongst them.

According to the British weekly, the well-performing economy of Israel despite the collapse of the government and the political chaos that ensued was a pleasant surprise.

The ranking

An overall score is used for assigning the ranks and there are five financial and economic indicators that are used for calculating the said score.

These include stock market performance, inflation, government debt, gross domestic product (GDP) and inflation breadth.

The survey cited a total of 34 wealthy OECD countries and Israel took the fourth spot with Spain, following Ireland that claimed the 3rd position.

The top position was taken up by Greece, while the second rank was assigned to Portugal. The bottom of the list was completed by Latvia and Estonia.

The list of top 10 best-performing OECD countries in 2022 also included Italy, France and Japan. As far as the US economy is concerned, it took the 20th spot after recording a growth rate of 0.2%.

The Economist also revealed that Germany was at the 30th spot, even though it was able to maintain political stability.

The performance

The survey discovered that countries that were not dependent on Russia for gas and oil delivery, such as Israel and Spain, were able to fare much better than average.

The Economist noted that the countries that were dependent on Russia were the ones that suffered the most. There was a one-fifth increase in average consumer prices in Latvia because of this.

According to the estimates of the Finance Ministry, there was a 6.3% growth in the economy of Israel in 2022, after it had expanded at a rate of 8.1% last year when it had been recovering from the COVID-19 pandemic.

Other details

30% of the economic activity in Israel is generated from the country’s exports and they are expected to have increased by almost 10% in 2022.

The Foreign Trade Administration (FTA) of the Economy Ministry said that this would mean that exports had risen to record highs of somewhere between $160 billion and $165 billion.

It is likely that the exports of services surpassed that of goods for the second year in a row, as numbers are expected to be around 51% and 49%, respectively.

Programming services were exported the most at 42% and then came research & development (R&D) services at 14%.

The largest trading partner for Israel is Europe, as it takes 38%, followed by America and Asia, which have a share of 35% and 24%, respectively.

In the last 12 months, inflation has risen in Israel to 5.3%, which puts it above the target range of the central bank, but it is still considerably lower than that of most developed countries.

Earlier this month, the Finance Ministry in Israel had reduced the growth outlook of the country for the next year from 3.5% to 3%.

It said that this was because they expected consumer spending to contract and the global economy to slow down.

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