Skip to content

Jerusalem Center for Public Affairs

Israel’s Global Embassy for Research-Powered Diplomacy

Menu

Tag: Israel’s Economy

How is Israel’s Economy Affected by the Security Situation?

How is Israel’s Economy Affected by the Security Situation?

December 19, 2004 | Prof. Ezra Sadan
Defense expenditures in Israel were less than 10 percent of GDP in the 1950s, climbing to 35 percent after the Yom Kippur War. After Israel signed the peace agreement with Egypt, defense expenditures leveled off while the economy kept growing, so the overall share of defense-related spending declined back down to 10 percent. In the 1980s, as a result of exposure of Israeli industries to competition, Israel shifted to new industries - moving from agriculture and textiles to high tech.