Why Israel’s Economy Is Thriving Now

BusinessAerospace & DefenseWhy Israel’s Economy Is Thriving NowByIlan Berman,Contributor.Forbes contributors publish independent expert analyses and insights. Ilan Berman writes about the Middle East and Eurasia.Follow AuthorApr 23, 2026, 09:28am EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.Israeli Currency, New Shekels. (Photo by: Independent Picture Service/Universal Images Group via Getty Images)Universal Images Group via Getty ImagesIt’s the most intriguing economic story that no one is watching. Over the last two months, international markets have been roiled by the U.S. campaign against Iran, which has sent energy prices soaring and injected tremendous volatility into global supply chains on everything from oil to fertilizer. Against this backdrop, many countries have struggled to maintain their economic dynamism—and even their solvency. One, however, hasn’t. Earlier this week, the Times of Israel reported that the shekel, Israel’s national currency, had strengthened significantly and was now trading at less than three to the American dollar. That historic benchmark hasn’t been met since the mid 1990s, when optimism over the unfolding Oslo peace process and an anticipated post-Cold War “peace dividend” fueled global growth and enthusiasm. What accounts for this surge now? One factor is growing investor confidence. The past year of conflict with Iran, first in the form of the June 2025 Twelve-day War and more recently in last month’s “Operation Roaring Lion,” has served as a showroom of sorts for Israel’s cutting-edge defense technology, and people are taking notice. The country’s high tech and defense sectors have long been the engine of the so-called “Startup Nation.” But over the past several months, potential consumers have been given a front row seat to the battlefield effectiveness of Israeli interceptors, drones and long-range strike capabilities. This has translated into ca...