Developments in Israel in 2022
Israel continues to be one of the world’s fastest growing markets- 2022 was a challenging year globally, but while Israel was not immune to these challenges, some predictions place its growth in GDP at 6.1%, which would still place it in the top 25 strongest performing economies worldwide. Learn more about the legal market in Israel in this article.
Inflation challenging key areas
Inflation in Israel is currently running at just above 5%, which is a 14-year high point and above the Bank of Israel’s target. However, this is still well below the rate that most other OECD countries are currently experiencing.
There has been a significant impact of these challenges in key areas, most notably in the number of new IPOs which in 2022 dropped from unprecedented record numbers in 2021 to a level more comparable with 2020, valuing a total of USD16.9 billion. 2023 is largely anticipated to be a year of consolidation, with several predictions of a high number of smaller-scale deals expected to become the norm.
Focus on Technology with a new Chambers subtable
Despite a turbulent year, technology remains a critical sector to the Israeli economy, and we are looking to reflect that in Chambers rankings going forward by introducing a new Technology subtable to our Corporate/M&A category. For now this extension will aim to highlight corporate lawyers making an outstanding contribution to the technology sector.
The theme of the startup nation maturing into a more well-established tech nation has continued in 2022 despite the turbulence. SPAC transactions remain highly popular and whilst the scale of new IPOs is smaller than last year, Israel remains one of the most popular nations globally for technology deals. This growth in the tech sector has a number of legal implications- for example, there is a growing trend of class actions brought on privacy violation grounds.
Developments in Real Estate and Energy Sector
In other areas of the economy, with the average house price in Tel Aviv increasing by around 17.5% last year, Israel is also experiencing a significant increase in demand for new housing, paving the way for a major boom in construction and real estate. This is complemented by a significant expansion of infrastructure projects, particularly in public transport, roads and seaports.
Israel has also seen notable developments in the energy sector. As part of the wider trend towards renewables, Israel is emerging as a major centre for solar power which some estimate as making up 90% of its renewables output. Furthermore, Israel is simultaneously experiencing a significant expansion in its natural gas resources, which has now overtaken coal as a proportion of Israeli energy consumption.
The impact of the Abraham Accords is also starting to bear fruit for Israel’s improved relations with the Middle East. Most notably, Israeli startups like OurCrowd have made significant investments into the Abu Dhabi market. This trend is predicted to grow steadily over the next few years.
Law Firms merging is an ongoing trend
In the legal sector itself, the ongoing trend of law firms merging has been sustained over the last 12 months and has continued to accelerate in terms of both frequency and scale. For example, the creation of the Arnon-Tadmor Levy law firm represented the largest merger in Israel to date. More recently, the merger between Goldfarb Seligman & Co and Gross & Co to form Goldfarb Gross Seligman has also been announced. More significant mergers are anticipated for 2023.
Overall, with 2022 representing a turbulent year for the world economy, Israel has seen its own fair share of challenges. After a very successful period, its GDP is anticipated to grow at a more modest rate over the last few years. However, on several key metrics Israel continues to outperform comparative countries, suggesting that the nation is well prepared to weather the storm.