There are moments in economic history where the gap between perception and reality becomes an opportunity. In recent years, Israel finds itself in exactly such a moment. Outwardly, it is perceived as a country in the midst of an ongoing war, surrounded by threats, and dealing with deep uncertainty. But a cold look – the kind that characterizes investors rather than headlines – reveals a completely different picture: a stable economy, a functioning capital market, and growth that doesn’t stop, perhaps only slightly slowing down.
The data backing this picture almost defies logic: a GDP per capita of approximately $58.9 thousand, 2.3% unemployment rate, 2.2% inflation, and 3.8% growth even during wartime. This is not an economy under wartime pressure; it is a system that knows how to operate within complexity, manage risks, and push forward even when the environment is far from ideal.
The Israeli story is significant far beyond the numbers. The Israeli capital market, the first to react to any security event, has proven time and again that while it may be sensitive, it also possesses the ability to recover swiftly and sharply. Volatility exists, but it does not translate into a loss of confidence. On the contrary, it creates a dynamic in which downturns turn into opportunities, and corrections arrive faster and stronger than expected.
Future pricing in the capital market
Take the exceptional returns of the indices since the October 2023 Hamas-led mega-attacks on Israel – all during a period of nearly continuous fighting. The TA-35, the flagship index of the Israeli stock exchange, surged by about 145%; the TA-Finance index recorded a 240% return; and the Real Estate index approached a 102% return.
Beyond the raw numbers, there is a clear expression here of “futures pricing” by the market, which time and again manages to see through the fog of war toward the tremendous growth potential of “the day after.”
Within this reality, the Abraham Accords have changed the rules of the game in the region. What began as a diplomatic move quickly evolved into a significant partnership.
Trade volumes between Israel and the United Arab Emirates, which reached an annual scope of about $3.2 billion in 2024 and have been maintained at that level since, are an expression of a relationship that is establishing itself and deepening. The cumulative trade volume between the countries since the signing already stands at over $14 billion, and the projection for continued growth up to roughly $16.5 billion this year only reinforces the trend.
Israel assists UAE against Iran threat
The significance of these accords does not end with the economy. In recent months, it has become clear just how deeply the cooperation between the countries can extend into other dimensions. It was recently reported that Israel assisted the UAE in deploying and operating advanced, Israeli-made defense systems on its soil, against Iranian threats.
This is the difference between an economic agreement and a true alliance. Beyond the immediate interest, there is an expression of substantial trust that has passed the test of reality.
Herein lies the broader lesson – the one relevant to Saudi Arabia. The Abraham Accords provide the framework that connects economics, technology, and security into a shared regional interest. For the Saudi leadership, which is focused on realizing “Vision 2030” – the ambitious flagship project to diversify the kingdom’s sources of income and turn it into a global hub – an alliance with Israel becomes a strategic imperative rather than just an ideological choice.
The cooperation between Israel and the UAE has already proven how such a connection shortens processes and generates real value in the transition from a resource-based economy to one based on innovation, technology, and regional security.
For countries seeking stability, economic diversification, and long-term growth, this is an opportunity that is hard to ignore. Saudi Arabia does not need to rely on theoretical assessments to understand this. The cooperation between Israel and the UAE already illustrates how such a connection creates value – not only through trade and investments but through the building of trust and a relationship based on mutual interests.
It is a connection that complements strengths: innovation and experience on one side, capital and regional influence on the other. Together, they create a more stable foundation for growth and development, and above all, a more stable regional reality than we have known in recent decades.
The Abraham Accords have already proven that this is possible; the only question is who joins and when.
Saudi Arabia – the answer is no longer found in theory, but in the reality being built around you.
The writer is a managing partner at Tier-A, a strategic communications consultancy. He advises listed and private companies in Israel and abroad on capital markets strategy, strategic planning, branding, IPOs, and crisis management.