Nvidia turbulence reaches Israel's output: about 40% of this year's growth depends on production abroad

In depth

Production by multinational companies outside the country is expected to add 2.2 percentage points to growth of 5.6% this year, according to a Bank of Israel forecast. That means about 40% of growth depends on production abroad. Nvidia's activity has become a significant component of Israeli growth, to the point that the Bank of Israel and the Central Bureau of Statistics publish GDP data even without it.

A drop in Nvidia's sales will be felt mainly in GDP data, in tax revenues and in the debt-to-GDP ratio, and less in the labor market. Leadership changes at the company may affect its expansion plan in Israel, and the question remains open.

Nvidia's impact on growth and the debt-to-GDP ratio could obscure structural problems in the economy and delay addressing them. The new government will need to carry out reforms and change its priorities.