Israel
Updated
What it is
Israel is a Middle Eastern country and the United States' principal regional military ally, with its own advanced defense industry including the Iron Dome and Arrow missile-defense systems. It has been in a long-running strategic rivalry with Iran that escalated into direct state-on-state warfare in 2026.
Why it matters lately
Israel and the United States launched strikes on Iran on February 28, 2026, opening a war that saw Iranian ballistic missiles strike residential buildings in Tel Aviv and Jerusalem and forced school closures and reduced business activity. Israel's GDP contracted at an annualized 3.3 percent in the first quarter of 2026 as consumer spending fell 4.7 percent and exports fell 3.7 percent, though the Bank of Israel projected 3.8 percent growth for the year (down from a pre-war 5.2 percent estimate) contingent on the ceasefire holding, with one estimate putting the war's cost at roughly $1 billion a day in missile defense alone.
Asymmetric Analytics view
Inference (AA): Israel is the direct counterparty to Iran in the 2026 war whose Hormuz, oil, LNG and food-price shocks run through the rest of the AA graph, making Israeli war costs and economic data a core input to the conflict's macro channel.