What Is the GDP Per Capita in Israel?
Uncover Israel's economic health and living standards by exploring its GDP per capita and what this key metric reveals.
Understanding a nation’s economic health and the living standards of its population often begins with examining its Gross Domestic Product (GDP) per capita. This economic metric provides insight into the average economic output attributable to each individual within a country. By exploring Israel’s GDP per capita, one can gain a clearer picture of its economic performance and its standing on the global stage, contextualizing the prosperity and productivity of its economy.
Defining Gross Domestic Product Per Capita
Gross Domestic Product (GDP) represents the total monetary value of all finished goods and services produced within a country’s borders over a specific period, typically a year. When this total GDP is divided by the country’s midyear population, the result is GDP per capita.
This per capita figure provides an average of the economic output or income per person, offering a useful indicator of a population’s general economic welfare and living standards. A higher GDP per capita often suggests a more productive economy and, consequently, a higher average income level for its residents.
Israel’s GDP Per Capita: Current Figures and Trends
Israel’s GDP per capita has shown dynamic trends in recent years, reflecting its evolving economic landscape. In 2023, estimates for Israel’s GDP per capita ranged from approximately $52,642 to $58,270, with 2024 estimates around $54,177.
Looking at the immediate past, Israel’s GDP per capita saw a decline of 4.17% from 2022 to 2023, falling from $54,931 to $52,642. However, prior to this, 2021 experienced a significant 16.96% increase from the 2020 figure of $44,680. This volatility highlights various economic influences impacting the nation’s per-person economic output.
Key Economic Sectors and Their Contribution
Israel’s economy is characterized by a significant contribution from its services sector, which accounted for 52.31% of the GDP in 2023. This broad sector encompasses financial services, real estate, public administration, education, and healthcare activities. The industrial and manufacturing sectors also play a substantial role, contributing around 15.07% of the GDP, including mining and utilities.
A prominent driver of Israel’s economic output is its high-technology industry, often referred to as “Silicon Wadi.” This sector exhibits rapid growth rates, averaging 8% annually in recent years, and is known for its intensive skill and capital requirements. Israel allocates approximately 4.9% of its GDP to research and development, which is among the highest percentages within OECD countries, fostering an environment for innovation. The country also maintains a significant presence in the global diamond industry, being a world center for cutting and polishing, and a major contributor to exports.
Israel’s Economic Standing in Global Comparison
Israel’s economic standing, as measured by GDP per capita, places it favorably among developed nations. In 2023, the IMF estimated Israel’s GDP per capita to be the 13th highest globally.
In 2020, Israel entered the top 20 economies for GDP per capita for the first time, ranking 19th with $43,689. This placed it ahead of countries like Canada, New Zealand, and the United Kingdom. While its nominal GDP per capita is high, Israel’s ranking in terms of purchasing power parity (PPP) is somewhat lower, at around 34th or 35th globally. This difference suggests that the cost of living in Israel can be higher compared to some other developed economies, impacting the purchasing power of its citizens despite their substantial average income.