Iran launched direct attacks on Israel over the weekend. Although Israel successfully intercepted the drone and missile, the possibility of Israeli retaliation remains uncertain. David Blumberg of Blumberg Capital joins his Yahoo Finance to discuss the current state of the Israeli economy in light of these developments.
Bloomberg argues that Israelis are “somewhat used to this kind of thing.” Blumberg points out that over the past 25 years, the country has weathered a number of crises but has achieved consistent growth. He pointed to Israel’s per capita GDP of $54,000, higher than some of the world’s largest economies, evidence of the economy’s ability to “grow despite recession.”
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This post was written by Angel Smith
video transcript
JOSH LIPTON: Last weekend, Iran launched its first-ever direct attack on Israel with hundreds of drones and missiles. David Blumberg is currently in Israel, where his venture capital firm Blumberg Capital has offices and investments. David joins us to learn more about the current state of the Israeli economy and technology community. David, it’s great to meet you and have you on the show.
David Blumberg: Thank you very much, Josh. I’m glad to see you as always.
Josh Lipton: David, you’re in Israel right now. You were obviously there over the weekend during this attack by Iran. So David, first of all, I would like to know how you are doing.
David Blumberg: As you can see, I’m fine. i am happy. I feel safe.
Last night, my team went to the site and had meetings with about 20 portfolio companies. It was held on Zoom instead of a meeting. But people are very resilient here.
I can’t see the street. The restaurant is full of people. The club is… The club is crowded and there is a traffic jam.
It’s amazing how common it is in a time when you think people would be really surprised if this happened in America or anywhere else. Unfortunately, Israelis are somewhat used to this kind of thing. This is the most severe yet. But they did a really great job with the Americans, the British, the Jordanians, the French, shooting down 99.9% of all projectiles. So I think people feel like they’ve won this battle.
Josh Lipton: So, David, the people of Israel are a resilient community. At the same time, you know, David, they’re engaged in this three-front war. It’s Iran. In the south there is Hamas. In the north is Hezbollah.
That’s a huge economic burden on the country, David. One can only imagine Hezbollah calling up soldiers and displacing tens of thousands of Israelis in the north. David, how is the economy sustaining this?
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David Blumberg: Well, Josh, I always like to look for history. As we recall, the past 25 years have seen four or five war-conflict situations, as well as things like COVID-19, the dot-com bust, and many other financial crises. This shows that over the last 25 years, Israel’s per capita GDP, which measures the productivity of all working individuals, has grown almost consistently 2% to 3% faster than its OECD countries over the same period. You can see.
There was a downturn now, but then it came back. But over time, we see this growth. And in fact, I was looking at the data recently, and in 2023, Israel will achieve a GDP per capita of $54,000. Now it’s higher than France, higher than England, higher than Japan, and I was amazed to see its growth. Because when I first started coming here, Israel was a much poorer country.
But the technology boom in particular has really boosted the economy. And, as you’re asking, it seems to be thriving despite and through the recession. There is a slump here, but next year there will be more momentum.
