The ongoing Israel-Hamas conflict is expected to cost Israel at least $6.8 billion, leading to economic challenges including deficits, stock declines, and disruptions in air travel, as warned by the IMF,
Aviv : As reported by the Times of Israel, the ongoing economic repercussions of the Israel-Hamas conflict are a matter of concern. Initial projections from Bank Hapoalim estimate that the war could cost Israel at least NIS 27 billion (approximately $6.8 billion), encompassing various factors such as the mobilization of reserve soldiers, infrastructure rehabilitation, and long-term support for affected soldiers and their families.
The report underscores the uncertainty surrounding the conflict’s impact on the economy and highlights the potential for a budget deficit increase of at least 1.5% of GDP in the coming year.
This economic turmoil has already had a noticeable impact, with local stocks and bonds taking a hit, businesses and schools remaining closed, and disruptions in air travel to Tel Aviv. Despite efforts by the central bank, the shekel has weakened.
Furthermore, the International Monetary Fund (IMF) has voiced concerns about the global economic fallout from the Israel-Hamas war, citing potential disruptions in oil production and transportation, which could impact oil prices and global economic growth.
The report also notes that Prime Minister Benjamin Netanyahu anticipates a prolonged and challenging conflict, contributing to Israel’s economic slowdown. Israel was already contending with economic challenges before the conflict, including a contentious judicial overhaul, rising inflation, and global economic headwinds.
The Times of Israel emphasizes the complexity of the economic implications, including potential changes in government spending, borrowing, interest rates, and taxes, all of which could have far-reaching consequences for Israel’s resilient yet delicate economy.
