Israel's stock market outperforms Middle East counterparts despite multi-front wars

Israel's stock market is at a record high and has seen the greatest gains of any country in the Middle East over the 22 months of war that began on Oct. 7, 2023.

Israel has been waging multi-front wars, sustaining the mobilization of hundreds of thousands of troops that would ordinarily be part of the workforce, it's currently facing charges of war crimes in international courts, all while grappling with a large protest movement and political turmoil at home. Despite this, its economic landscape remains buoyant – lifted by significant foreign investment and more recently by renewed investor confidence following its 12-day conflict with Iran.

Initially dropping as much as 23% in the month following the October Hamas attack and Israel's declaration of war, the Tel Aviv Stock Exchange had rebounded to and exceeded pre-war levels by the first quarter of 2024. As of July 17, the TASE is up over 200% from its Oct. 2023 low.

The country's GDP for the last quarter of 2023 shrank nearly 20%, following a deep contraction in private consumption and investment triggered by the war. The full year nonetheless finished with modest growth of 2%, and a further 1% GDP growth in 2024, driven mainly by government spending. In June of this year, the OECD forecast 4.9% growth in economic activity for Israel in 2026.

“In 2024, about 161,000 new trading accounts were opened in the Israeli capital market,” a July report published on the Tel Aviv Stock Exchange website stated. That figure represents a threefold jump in the number of accounts opened compared to 2023.

The report added that the first half of 2025 saw a further 87,000 new trading accounts opened, some 33,000 of which were in investment houses.