How Israel went from 370% hyperinflation in the 1980s to Becoming a global high-tech powerhouse

 It has faced decades of geopolitical tension and hostile borders. Yet today, Israel ranks among the wealthiest and most advanced economies in the world.

New Delhi: Israel is a small Middle Eastern nation on the Mediterranean Sea, home to just 9.4 million people. It lacks vast oil reserves, expansive farmland, and a massive domestic market. It has faced decades of geopolitical tension and hostile borders. Yet today, Israel ranks among the wealthiest and most advanced economies in the world.

Its economic output is more than ten times that of some neighboring countries. Its GDP per capita exceeds USD 52,000 — higher than nations such as Canada, Germany, Japan, and the UK. It is ranked among the most innovative countries globally and spends more on research and development as a share of GDP than even the United States.

But this prosperity was not inevitable. In fact, less than four decades ago, Israel’s economy was on the brink of collapse.

The Crisis of the 1980s

By the mid-1980s, Israel was battling hyperinflation that peaked at over 370 percent annually. The Israeli shekel had become nearly worthless. Citizens avoided using their own currency, preferring US dollars instead. Business contracts became nearly impossible to structure because prices changed so rapidly. A salary agreed upon one year could lose much of its purchasing power the next.