The Western Wall and Temple Mount in Jerusalem. Photo: Wikimedia Commons.

An October 2025 ranking of the world’s economies, using 2026 projections from the International Monetary Fund, indicates that in spite of two years of existential war against multiple enemies, including Hamas, Hezbollah, Iran, and the Houthis, Israel’s economy is performing surprisingly well.

Gross domestic product (GDP) is expected to increase to nearly 700 billion dollars, ranking 27th in the world — impressive for a small country with a little more than 10 million people. Per capita, the situation looks even better. Israel’s per capita GDP ranking is 16th, edging out Germany (18th) and the UK (19th) and well above Canada (22nd) France (26th), and Italy (28th).

These numbers could not help but remind me of a column by Alistair Heath in the June 2025 Daily Telegraph on “Israel’s Divine Survival.” Heath starts by saying there is something about Israel that makes people uncomfortable:

A nation this small should not be this strong. Period. Israel has no oil. No special natural resources. A population barely the size of a mid-sized American city. They are surrounded by enemies. Hated in the United Nations. Targeted by terror. Condemned by celebrities. Boycotted, slandered, and attacked. And still, they thrive like there’s no tomorrow.

Is Israel thriving?

Well, besides economic measures, other indicators also defy expectations. For example, it was also recently reported that life expectancy in Israel increased by one full year, a significant jump, to 83.8 years, between 2023 and 2024. Life expectancy in Israel is now the fourth highest in the 37 member OECD, exceeded only by Switzerland, Japan, and Spain.

Israel also ranks near the top for measures such as low infant mortality and success in disease prevention. Israel is among the countries with the lowest mortality rate from heart disease. And this high level of care is delivered efficiently at relatively low cost. OECD-member states typically devote 11 to 12 % of GDP to health care. The value for Israel is only 7.6 %. (Health care expenditure in the US is about 17% of GDP.)

Then there is the “Global Flourishing Study,” a new study that asks the question “What makes people flourish?” Published In April 2025 in the journal Nature Mental Health, the study, headed by Tyler J. Vanderweele of Harvard University, is a multi-year survey of 200,000 people, across 22 culturally and geographically diverse countries, including Israel, the US, Japan, Sweden, and the United Kingdom.

The domains measured included: happiness and life satisfaction, physical and mental health (how healthy people feel, in body and mind), meaning and purpose (whether people feel their lives are significant), character and virtue (how people act to promote good), social relationships (both friendships and family ties), and financial and material stability.

Israel ranked number two (of 22 nations), behind Indonesia when financial indicators are included, and number four (after Indonesia, Mexico, and Philippines) when financial indicators are excluded. The primary finding of the study so far (the study will be completed in 2027) is that high income countries are not necessarily flourishing countries. Israel is the outlier.

The 2025 World Happiness Index also shows Israel is still high up the list of 147 countries, at number 8.

If you ask Google AI why Israel continues to thrive in conditions not normally conducive to success, you get a prosaic answer: Israel’s ability to thrive, in spite of regional challenges and limited natural resources, is due to the combination of an emphasis on higher education and research, a culture of innovation and entrepreneurship, significant foreign support and investment, defense needs, and a democratic institutional framework that protects property rights and promotes a market economy.

But to Alistair Heath Israel doesn’t make sense unless you believe in something beyond the math. “There is no historical precedent for surviving the Babylonians, the Romans, the Crusaders, the Inquisition, the pogroms, and the Holocaust, and still showing up to work on Monday in Tel Aviv,” he wrote. Perhaps the secret to understanding Israel’s success is not any different from appreciating the resilience displayed by the Jewish people through the ages. Or, as expressed by a quotation attributed to the noted Swiss psychologist Carl Jung, “I am not what happened to me, I am what I choose to become.”

Jacob Sivak, a Fellow of the Royal Society of Canada, is a retired professor, University of Waterloo.