$1 trillion in Israeli exports within 20 years? GDP +11% YoY. Bank of Israel shakes up lending. | TV10 Daily
Re: December 16, 2025 in Israel - and what it all means for investors at home and abroad.
IL exports hit $160 billion…Saga of two sectors going strong
Economy Minister Nir Barkat announced today that total exports are projected to reach $160 billion by year-end, a 3% increase YoY and scraping the all-time record set in 2022.
Look under the hood of this fancy headline to reveal a sharp divergence in the economy.
On one hand, services exports drove this growth, surging 9% to $101 billion. That sector is dominated by high-tech, software, and R&D, and now accounts for over 63% of Israel’s total foreign capital inflows.
By contrast, the physical goods sector lags behind. The export of physical goods has struggled to recover, dropping 5% to $57 billion. The Ministry noted specific weakness in goods exports to Israel’s traditional trading partners: the EU (-11%), China (-6%), and the US (-4%).
Israel’s economy is growing increasingly weighted toward intangible assets. While factories face hurdles, the tech sector continues to carry the torch. Minister Barkat remains bullish, reiterating the state’s strategic goal,“$1 trillion in exports within 20 years.”
Exports helped: Israeli Q3 GDP up 11%
After a sharp contraction in the second quarter due to this summer’s 12-Day War, the Israeli economy is rebounding. Data released today by the Central Bureau of Statistics shows the GDP grew by an annualized 11% in Q3 2025. Another way of looking at that stat is +2.6% from Q2 to Q3 of this year.
GDP, of course, represents the total value of all goods and services produced in an economy. This particular bump can’t be chalked up to a government spending spree.
Here, the private sector is driving the recovery:
Revenge spending? Private consumption skyrocketed by 21.6% as the security situation stabilized.
Capital projects thawing: Fixed asset investments jumped 34%, signaling that companies are unfreezing capital projects and rebuilding.
Bank of Israel: a wag of the finger to ‘top-up’ loans on mortgages, and a big reveal - hidden consumer debt
Israel’s banking regulator is moving to stabilize households, introducing new measures to curb risky borrowing behavior. The move follows a Bank of Israel report highlighting a concerning rise in households taking additional “top-up” loans immediately after securing their primary mortgage, significantly increasing their total debt burden. With the directive, lenders will be forced to validate that a borrower can shoulder their entire debt load rather than just the mortgage payment.
This regulatory tightening reveals that many homebuyers have been using expensive consumer credit to bypass standard mortgage caps, effectively entering the market with “invisible leverage” and near-zero real equity. By closing this loophole, the Bank of Israel is acknowledging that hidden consumer debt has become a systemic threat.
The Supervisor of Banks (part of the Bank of Israel) has mandated a stricter calculation of the Payment-to-Income (PTI) ratio. From now on, when approving additional loans secured by the same property, banks must calculate the monthly repayment based on the total credit secured by the asset.
At the same time, the regulator is easing access to credit more broadly.
The regulator has made a wartime measure permanent, allowing banks to approve general-purpose loans with a Loan-to-Value (LTV) ratio exceeding 70%. The caveat is that amounts over the 50% LTV threshold cannot exceed 200,000 ILS. Additionally, property value ceilings for subsidized housing (like “Mechir Mufchat”) will now be indexed to the Consumer Price Index (CPI).
These measures acknowledge that Israelis, especially after wartime, may need more flexible access to credit.
TASE snapshot for Monday, Dec. 16, 2025
TA-35 Index (TASE:TA35): 🟢 +0.44%
TA-90 (TASE:TA90): 🟢 +1.47%
TA-125 (TASE:TA125): 🟢 +0.58%
That’s our Tuesday here in Israel 🎉
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