According to Barclays analysts “Tel Aviv’s main indices kick off 2011 at or near all-time highs, with a strong economic backdrop continuing to provide support…The banking sector is well capitalized, the emerging energy sector remains squarely in focus and the local technology sector is capitalizing on the fastest-growing trends in tech. While the markets are high, we still see opportunity.” In addition, they noted that Israel’s change from an emerging market classification to a developed market “opens up Israel to a broader range of potential new investors and flows of capital.”
Barclay’s analysts predict that that Israel’s economy will transition from an economy based mainly on human development as employed in the high tech industry to an economy founded on natural resources such as the newly discovered natural gas. “Israel’s economic performance is improving. Growth has broadened and strengthened; the economy seems to be well on the way to full recovery.” Although analysts note that inflation may be a problem, they expect Israel to develop from a major debt country to a minor debt country within the next ten years.