Nvidia-Dominated Production Abroad Reshapes Israeli GDP Numbers

Nvidia accounts for over 90% of Israel's production abroad, significantly impacting the country's GDP numbers. This phenomenon has led to a widening gap between headline economic growth and domestic activity. The Central Bureau of Statistics (CBS) has started publishing growth figures both with and without production abroad.

In the first half of 2026, Israeli production abroad reached NIS 25.4 billion, or approximately 5.7% of total GDP. This figure is a significant increase from NIS 5.3 billion in the first quarter of 2023, which was about 1.3% of total GDP at that time.

The annual figures show an even more striking trend. In 2023, approximately NIS 25 billion of Israeli GDP was produced abroad. This figure rose to about NIS 32 billion in 2024 and to approximately NIS 56 billion in 2025. If production abroad in the second half of 2026 matches the first half, it would reach roughly NIS 93 billion for the year.

The distinction between GDP attributed to Israel and economic activity taking place within the country is crucial when assessing growth rates, interest rates, and tax revenues. The Bank of Israel should consider this phenomenon when making monetary policy decisions.