With Nvidia, Israel’s economy is booming. Without it, the picture is more complicated | CTech

This week, the Bank of Israel did something unprecedented when it presented its macroeconomic forecast. For the first time, it split its growth projections into two measures: growth including production by Israeli companies abroad, and growth excluding it. In simple terms, with Nvidia and without Nvidia.

This is not merely a technical adjustment. It is an explicit acknowledgment by the central bank that two very different economic realities are unfolding in Israel, and that only one of them fully reflects what is happening to workers, consumers and the domestic labor market.

Production abroad, which includes goods developed in Israel, manufactured by overseas subcontractors and sold abroad without ever crossing the Israeli border, has surged from 1.7% of GDP in 2023 to 3.5% in 2025 and 5.8% in the second quarter of 2026. The result is a striking headline forecast: growth of 5.6% in 2026 and 7.5% in 2027. By almost any standard, these are impressive figures, well above the averages in the International Monetary Fund’s forecasts released a week ago.

But exclude production abroad, and the picture changes. Growth is projected at 3.4% this year and 5.1% in 2027. This component alone contributes 2.2 and 2.4 percentage points to the respective annual growth rates. The Bank of Israel acknowledges that uncertainty surrounding this activity amounts to at least one percentage point in…