Despite the humanitarian catastrophes unleashed by Israel on Gaza with the full complicity of Western powers, the war has severe consequences for the Israeli economy in the long term.
There are many fears about how the prolonged fighting could affect the economy of Israel, which has achieved nothing from the war since October 7, except for its constant barrage of airstrikes that kill innocent civilians, destroy their homes and level their neighbourhoods.
The negative repercussions of this war on the Israeli economy stem from mobilisation of than 350,000 reserve soldiers into service. This number represents about 3 per cent of the total population of 9.8 million of Israel.
Recalling this huge number of workers and removing them from the production process has a direct impact on the daily and economic level.
A sudden shortage occurs in the workforce and in the conditions of many Israeli companies, which constitutes a large financial cost to these institutions, and a delay in the completion of projects and an increase in levels of tension in Israeli society.
Hapoalim Bank expects that the cost of the war between Israel and Hamas will reach billions of dollars, as these costs could currently represent about 1.5 per cent of Israel’s GDP and will increase the country’s deficit.
The experts also believe that the main impact will be felt in the private consumption figures, and the tourism and knowledge sectors, creating other complications and making peace in the Middle East more distant and impossible.
On other levels, since the beginning of this year, the Israeli currency has witnessed a decline in its value as a result of protests against the government’s plan to reform the judiciary, while the current crisis increases the loss of this currency by about 3.1 per cent of its value.
The current crisis represents a major indicator of the decline in Israel’s economic growth during the current year and the coming years and will create great difficulties.
‘Al-Aqsa Flood’ led the Israeli Central Bank to sell about $30 billion in foreign currencies to support the shekel and prevent its collapse. Some experts believe that the foreign investments will flee, especially in well-known sectors if the war drags on, especially if its scope expands to include other countries.
‘Al-Aqsa Flood’ has led to negative effects on local stock and bond markets, with many indicators declining. A number of international airlines have also stopped coming to Tel Aviv, which has direct effects on the tourism sector.
Finally, officials at the International Monetary Fund believe that the current war of Israel over Gaza will darken the already cloudy global economic prospects, and this war will have impacts on the economic and geopolitical conditions of Middle Eastern countries and others, especially on the oil, financial and trade, transportation, and other sectors.
Western countries did not take into account morality in this war, since they use double standards, but the final result will be in favour of the Palestinians because they are fighting for their land, their honour, and their principles.
Western countries did not take into account morality in this war, since they use double standards, but the final result will be in favour of the Palestinians because they are fighting for their land, their honour, and their principles.
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