Israel is the most likely country in the developed world to provide riskless returns on investments, according to a report in Bloomberg Businessweek.
Despite a month-long war with Hizbullah in 2006, Operation Cast Lead against Hamas in 2008, existential threats from a pre-nuclear Iran, international and regional pressures, and internal socio-political and land turmoil, the Tel Aviv TA-25 Index returned 7.6 percent in the past decade, the highest amount of any of the 24 developed-nation benchmark indexes. The next best index was Hong Kong’s Hang Seng Index, followed by Norway’s OBX.
The past 10 years saw investments by US investment tycoon Warren Buffett, Apple, International Business Machines Corp, Intel, and others.
The Israeli gauge returned 161 percent including dividends over the last decade, according to Bloomberg, coming behind Norway and Hong Kong. But it was considered significantly more stable than either.
Governor of the Bank of Israel Stanley Fischer, is credited with much of the Israeli economy’s growth and stability. Fischer is serving his second term, and has been a proponent of buying large amounts of foreign currency in an effort to help exports, which account for 40 percent of Israel’s gross domestic product.
Israel’s economy expanded approximately 4.8 percent in 2011, according to the International Monetary Fund, compared with 1.7 percent growth for the U.S.
Finance Ministry projections show Israel’s gross domestic product is expected to grow 3.2 percent in 2012, almost three times the 1.2 percent average for the Group of 10 countries.
This year, the TA-25 had its best early part of the year since 1997, with a 3.1 percent rally in January, according to Bloomberg. Teva pharmaceuticals and Dead Sea harvester Israel Chemicals comprise over 20 percent of the TA-25, but earn less than 6 percent of their revenues in Israel.