Israel profile

Demography and Health

Israel’s population stands at about 9.97 million in 2024, placing it among mid‑sized high‑income economies with a relatively high population density in key urban corridors. The country shows strong human development indicators: life expectancy at birth is about 83.2 years (ranked 16), and mortality is low across the board, with under-5 mortality around 3.4 per 1,000 live births. Birth rates remain elevated enough to sustain population growth in the near term, at 18.6 births per 1,000 people. Taken together, these demographic dynamics support a robust labor force while also presenting ongoing demand for advanced health and elder care services as the population ages. Net migration in 2024 is positive, about 10,612 people, contributing to population growth and bringing skilled human capital into the economy while moderating aging pressures. Health system capacity appears solid: physicians per 1,000 people are 3.71, and hospital beds per 1,000 are 3.06, indicating a well‑developed medical workforce and infrastructure relative to many peers. The health spend is 7.34% of GDP, with domestic general government health expenditure per capita (PPP) around 2,664 international dollars, signaling substantial public investment in health without crowding out private or market mechanisms. Public health outcomes are supported by favorable nutrition indicators, with undernourishment at 2.5% (2022). In a digitally connected society, 87% of the population uses the Internet, which aids access to health information, telemedicine, and health services. The health landscape reflects a high‑income, innovation‑driven economy that prioritizes quality of care, workforce capacity, and preventive health, even as it navigates a complex regional security environment that can influence health resilience and service delivery planning.

Economy

Israel exhibits a high‑income, knowledge‑based economy. GDP per capita stands at about 54,177 current US$, with PPP‑adjusted GDP per capita around 55,691 international dollars, underscoring strong purchasing power and living standards. The economy is highly open to trade and investment, with exports of goods and services equaling roughly 28.4% of GDP in 2024 and imports accounting for about 26% of GDP, signaling a relatively open, technology‑driven economy that relies on global supply chains. The current account balance is in surplus at about 3.09% of GDP, reflecting healthy external relations and a favorable balance of payments position that supports macroeconomic stability. Foreign direct investment (net inflows) reach about 3.11% of GDP in 2024, indicating continued investor confidence and capital inflows into sectors such as technology, manufacturing, and services. Inflation in 2024 is moderate at around 3.06%, which, together with low unemployment (3.37%), points to a favorable macroeconomic climate for households and firms. A core strength of the Israeli economy is its commitment to research and development; R&D expenditure amounts to 6.02% of GDP in 2022, the highest among many peers, underscoring a policy and culture that prioritizes innovation as a primary engine of growth. This innovation intensity is reflected in high‑tech activity and output, including substantial high‑technology exports (about $19.86 billion in 2024) and a strong patent culture, which together underpin global competitiveness and productivity growth. The fiscal and regulatory environment supports private enterprise, though ongoing attention to cost of living, housing supply, and long‑run workforce skills remains important to sustain momentum.

Trade and Investment

Israel’s external orientation is characterized by a high level of trade openness and significant knowledge‑intensive exports. Exports of goods and services equal roughly 28.4% of GDP in 2024, while imports account for about 26% of GDP, signaling a relatively balanced and open trade posture that integrates Israel into regional and global value chains. The nation’s logistics to trade and transport infrastructure is robust, with the Logistics Performance Index at 3.7 (on a 1–5 scale) and ranked 9th globally in 2022, indicating strong capabilities in the movement of goods and efficiency in supply chains. High‑technology exports are substantial, totaling around 19.86 billion USD in 2024 and reflecting the country’s specialization in advanced electronics, software, biotech, and other hi‑tech sectors. Israel ranks highly in innovation indicators relevant to trade, including resident patent activity (1,592 patent applications in 2021, rank 22) and a proactive R&D ecosystem, which together support export competitiveness in technologically sophisticated products and services. Foreign direct investment remains a meaningful source of capital and know‑how, with net inflows at about 3.11% of GDP in 2024, signaling continued investor interest in productive sectors and infrastructure. The external accounts are supported by a positive current account balance (about 3.09% of GDP in 2024), reinforcing resilience against external shocks and contributing to overall macro stability. The combination of open trade, strong R&D intensity, and supportive investment conditions helps sustain growth in sectors such as software, cybersecurity, biotech, and industrial tech, while also enabling diversification beyond traditional industries.

Governance and Institutions

Governance indicators show a mixed but generally favorable picture for Israel. Regulatory quality is strong (1.12), placing the country around the upper middle tier in global benchmarks (ranked 31). Rule of Law (0.784) and Control of Corruption (0.829) indicate solid legal foundations and relatively effective governance mechanisms in practice (ranks 43 and 37 respectively). Government effectiveness sits at 1.15, with a rank around 30, suggesting relatively capable public administration and policymaking in delivering public goods and services. However, Political Stability and Absence of Violence/Terrorism registers a lower standing (−1.46, rank 178), reflecting ongoing security risks and regional tensions that can influence policy continuity, investment climate, and social resilience. The interplay of strong regulatory and governance foundations with security challenges highlights the value of institutions that can withstand volatility, maintain policy credibility, and protect investors and citizens in a high‑change environment. The evidence points to a robust legal and regulatory framework that supports market functioning, innovation, and public service delivery, while underscoring the importance of continued attention to security, conflict risk management, and social cohesion to sustain long‑term governance effectiveness.

Infrastructure and Technology

Israel stands out for its advanced infrastructure and a technology‑driven economy. Internet penetration is high, with 87% of the population online, enabling widespread digital services, e‑health, e‑government, and e‑commerce. The country also has a strong capacity for innovation as reflected in its R&D intensity (6.02% of GDP in 2022, the highest level in many peer groups) and a high level of high‑tech exports (approximately $19.9 billion in 2024). A dynamic patent system is evident, with residents filing 1,592 patent applications in 2021 (rank 22), underscoring a vibrant inventive activity that fuels competitive advantage. Infrastructure for trade and transport is acclaimed, with a Logistics Performance Index of 3.7 (rank 9), indicating quality, reliability, and efficiency in moving goods, critical for an export‑oriented, technology‑driven economy. Health and social infrastructure complement these strengths: physicians (3.71 per 1,000 people) and hospital beds (3.06 per 1,000) reflect substantial healthcare capacity, while domestic health expenditure per capita in PPP terms remains strong. Taken together, these indicators depict an economy with deep technological capabilities, a sophisticated innovation ecosystem, and substantial physical and digital infrastructure that support productivity and living standards.

Environment and Sustainability

Israel faces notable environmental challenges alongside a strong capacity to innovate toward solutions. The Level of water stress, measured as freshwater withdrawal relative to available resources in 2021, is reported at 132.0 with a rank of 12, signaling relatively high water scarcity compared with many other countries. This imposes water resource management pressures on agriculture, industry, and urban use, but Israel has established world‑leading technologies in desalination, wastewater reuse, and water efficiency to mitigate scarcity. Renewable energy consumption accounts for 6.2% of total final energy consumption (2021), indicating substantial room for growth in clean energy to diversify energy supply and reduce greenhouse gas intensity. Total greenhouse gas emissions per capita stand at 8.08 t CO2e, a level common among advanced economies but higher than global averages, highlighting the ongoing imperative to accelerate decarbonization and energy transition. The country’s environmental trajectory benefits from high‑tech solutions and a strong research ecosystem, which enables the development and deployment of innovative water, energy, and climate technologies. While the environmental endowments pose challenges—particularly in water resources and emissions—Israel’s policy environment and innovation capacity provide substantive leverage to advance sustainability outcomes while sustaining economic growth and social well‑being.