Nvidia is responsible for more than 90 percent of Israel’s production abroad, helping to push overseas economic activity to NIS 25.4 billion and widening the gap between the country’s headline GDP growth and activity taking place within Israel.
The development emerged from national accounts data released by Israel’s Central Bureau of Statistics, which showed that the economy grew by 3.2 percent over the relevant six-month period in 2026.
However, when production carried out abroad by Israeli companies is excluded, growth falls to just 1 percent.
The figures show how much overseas production has grown in recent years. In the first quarter of 2023, Israeli production abroad was valued at NIS 5.3 billion, representing about 1.3 percent of GDP.
By the second quarter of 2026, it had climbed to about NIS 25.4 billion, or 5.7 percent of GDP.
Much of the increase is linked to Nvidia, formerly Mellanox, whose chips are developed by Israeli teams but manufactured outside the country. While the Central Bureau of Statistics does not provide a company-by-company breakdown, more than 90 percent of Israeli production abroad is linked to Nvidia, according to Calcalist.
Other Israeli companies, including defence firms and some traditional manufacturers, also produce goods outside the country.
The statistics agency said Israeli companies have long generated production abroad, but the activity was previously too small to warrant separate treatment in its economic reports.
That has now changed as the value of overseas production has risen sharply.
Annual figures show that Israeli production abroad stood at around NIS 25 billion in 2023, increased to NIS 32 billion in 2024 and reached about NIS 56 billion in 2025.
If the trend recorded in the first half of 2026 continues, overseas production could reach roughly NIS 93 billion for the year.
The growing contribution is also changing the way Israel’s economic growth is viewed.
In 2023, growth excluding production abroad was 1.9 percent, just 0.1 percentage point below overall GDP growth. The gap increased to 0.4 percentage point in 2024 and 1.4 percentage points in 2025.
This year, the difference has widened to 2.2 percentage points, with overall growth at 3.2 percent compared with 1 percent when overseas production is excluded.
The distinction is significant because production carried out abroad can increase national income and corporate profits without generating the same level of employment, investment and demand inside Israel.
It could also affect how policymakers assess the country’s recovery from the war and the strength of the domestic economy.
A strong GDP figure normally signals that an economy may be nearing the limits of its productive capacity, potentially putting pressure on inflation and making central banks more cautious about cutting interest rates.
But overseas production does not necessarily compete for Israeli workers, factories or other domestic resources.
That means some of the growth reflected in the headline GDP figures may have a smaller impact on domestic inflationary pressure than the overall numbers suggest.
The distinction could also become important for government revenues.
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Companies producing abroad can still generate profits and pay corporate taxes in Israel, but production within the country creates a wider economic chain involving workers, suppliers, offices and local services.
As a result, the same amount of GDP can produce different outcomes for employment, tax revenues and living standards depending on where the underlying economic activity takes place.
The rise in overseas production reflects the growing international reach of Israeli companies, particularly in technology and defence.
But with production abroad now accounting for a much larger share of GDP, the Central Bureau of Statistics’ decision to publish figures both with and without it is giving policymakers a clearer view of what is happening inside the domestic economy.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
