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Jerusalem. Never mind the collapse in confidence in Europe, the Palestinian proposal for United Nations recognition and heightened tensions with neighboring Egypt and longtime ally Turkey. The Israeli economy just keeps growing faster than the rest of the developed world.

The International Monetary Fund this week raised its forecast for the country and cut its estimate for the global economy on the impact of the European debt crisis. Israel’s gross domestic product will expand 4.8 percent this year, according to the Washington-based lender. That’s up from an April forecast of 3.8 percent and triple the pace for the average of the 34 advanced economies.

Citigroup said on Sept. 18 it would establish a new Israeli research center and Standard & Poor’s a week earlier raised the country’s credit rating. It cited the discovery of two gas fields off the coast of Israel that hold an estimated 25 trillion cubic feet of the fuel. Mellanox Technologies, the 12-year-old Israeli adapter maker part-owned by Oracle Corp., says sales will grow 80 percent in the third quarter.

“The Israeli economy is very vibrant,” finance minister Yuval Steinitz said. “We enjoy very low unemployment and nice economic growth and this is mainly because we managed to develop very advanced high tech industries and very strong exports.”

The stock market in Israel, whose population of 7.8 million is similar to Switzerland’s, was upgraded to developed-market status by MSCI Inc. in May 2010, the same month the 63-year-old country was accepted into the Paris-based Organization for Economic Cooperation and Development.

The country has about 60 companies traded on the Nasdaq Stock Market, the most of any nation outside North America after China and is also home to the largest number of startup companies per capita in the world.

Israel ranks third in terms of projected growth this year among MSCI’s list of 24 developed economies, after 6 percent for Hong Kong and 5.3 percent for Singapore, according to the IMF.

Venture-capital backed Israeli technology companies raised $364 million in the second quarter of this year, a 77 percent jump from the $206 million raised in the year-earlier period, according to PricewaterhouseCoopers Moneytree report.

Seventy-six companies raised funding in the three-month period, compared with only 60 last year, the report said.

The good times may not last, but Israel has emerged from economic turmoil before.

The shekel has weakened more than 5 percent this year, headed for its biggest annual drop against the dollar since 2005 when it fell 6.1 percent.

“We weren’t Switzerland to begin with,” said Yaniv Pagot, chief strategist for the Ayalon Group, a holding company with interests in insurance, the capital market, and real estate. “We’ve had the Lebanon War, the Cast Lead military operation in the Gaza Strip, and the economy has dealt with temporary situations. If the situation lasts longer, if it becomes permanent, that could have an impact.”

This didn’t deter Standard & Poor’s from raising Israel’s credit rating earlier this month to A+, its fifth-highest investment-grade rating, just a few weeks after cutting the United States and before cutting Italy.

Bloomberg