Initial Israeli estimates indicate that the war launched by Tel Aviv on… Gaza strip A month from now, the budget may cost more than 200 billion shekels ($51 billion).
In the last quarter of 2023, the Israeli economy is heading to cancel all the gains it achieved during the current year, due to the war on the Gaza Strip.
A few days ago, a bank report stated:JP Morgan ChaseThe American, in which he said that the Israeli economy may shrink by 11% on an annual basis, in the last three months of this year, with the escalation of the aggression against Gaza.
The last time Israel recorded this contraction was in 2020, with the economy closed due to the outbreak of the Corona pandemic.
The Ministry of Finance’s initial estimate of the cost of the war to the state treasury is based on the fact that the event lasts between 8 months and a year, no additional arenas will be developed, and the 350,000 reserve soldiers will return to work soon.
The Hebrew newspaper “Yedioth Ahronoth” indicated that due to the many assumptions and uncertainty regarding them, the Treasury Department set the number of 200 billion shekels as an optimistic estimate.
Last month, Moody’s, the credit rating agency, issued a report in which it placed Israel under review, anticipating the possibility of lowering its credit rating, due to the consequences of the ongoing war. Fitch Ratings also took a similar step by placing Israel under surveillance, while Standard & Poor’s announced that it lowered its expectations for Israel’s rating from stable to negative.
Last week, 300 senior Israeli experts warned that the Israeli economy is going through a difficult time, requiring immediate action to prevent further damage.
Economists sent a letter to Israeli Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich, in which they wrote: “You do not understand the magnitude of the crisis that the economy is facing. You must act differently.”
She pointed out that economists look at “a difficult time for the Israeli economy today… and measures must be taken to prevent major damage immediately.”
It was reported that among the signatories were Roni Hezekiah, the former supervisor of banks and public accountant, Yair Avidan, the former supervisor of banks, and Jacob Frankel, the former governor of the Bank of Israel.
The list also includes Elhanan Helfman of Harvard University, Haim Shani, former director general of the Ministry of Finance, Josh Angrist, winner of the 2021 Nobel Prize in Economics, and others.
Below are the most prominent losers in Israel’s economy
During the aggression on Gaza, the TASI 35 index of the Tel Aviv Stock Exchange fell by 15%, while the shares of some companies in it fell by more than 35%, compared to the close before the war.
The stock market’s market value lost $25 billion, before reducing its losses in last week’s trading, with initial indications of the expected losses of the war emerging.
From the eve of the war until the end of last October’s sessions, the shares of the five largest banks listed on the Tel Aviv Stock Exchange declined by 20%, as a result of the war.
The five largest banks in Israel are: Bank Leumi, Bank Hapoalim, Discount Bank, Mizrahi Tefahot Bank, and First International Bank of Israel.
Local and foreign investors continued to sell their shares in listed Israeli companies, especially banks operating in the local market.
During the past month, the exchange rate of the Israeli shekel against the dollar fell to its lowest level since 2012, to 4.08 shekels.
On October 9, the Bank of Israel (the Central Bank) announced an injection of up to $45 billion in an attempt to stabilize the shekel’s exchange rate, but the exchange rate figures show the failure of the bank’s plan.
Agriculture and food
The production of agricultural crops in the Gaza Strip settlements was affected during the war, due to the presence of a significant percentage of crops in these lands.
Last month, the newspaper “Globus”, which specializes in the Israeli economy, published a report in which it talked about the importance of the lands of the Gaza envelope settlements for the agricultural food security of the Israeli market.
The newspaper quoted Amit Yifrach, head of the Israeli Farmers Union, as saying that 75% of the vegetables consumed in Israel come from the Gaza Strip, in addition to 20% of fruits and 6.5% of milk.
The area surrounding the Gaza Strip is known as the “Israeli vegetable patch,” and it also contains poultry and livestock farms, in addition to fish farms.
Also, large areas of agricultural land in the north on the border with Lebanon were subject to the suspension of crop harvesting due to security tensions with Lebanese Hezbollah and the factions in southern Lebanon.
Regarding the workforce in Israel, the army summoned 350,000 employees to join the army, representing 8% of the total workforce in Israel.
In addition to this number, there are approximately 140,000 Palestinian workers who were working in Israel, and whose work has been disrupted since the seventh of last October, due to the ongoing war.
The Exporters Union and private economic institutions called for the need to restore employment so that the economy does not suffer an unprecedented state of deterioration.
Last Thursday, the Israeli Ministry of Labor said that about 46,000 Israeli workers had been laid off since October 7.
This came a month after the announcement of unemployment data in the Israeli market, which amounted to 3.1% of the total labor force.
The Ministry stated – in a statement – that there are 760,000 Israeli workers, or about 18% of the workforce, who are not working at the present time, for three reasons: the service of reserve Israeli workers and employees in the army, workers who live in the vicinity of Gaza, and others who were forced to The new conditions of staying with their children at home.
On the seventh of last October, the Palestinian resistance was launched – led by… Izz al-Din al-Qassam Brigades The military wing ofagitation– practical “Al-Aqsa flood“ Against the occupation, Israel followed it up with a war on Gaza, which entered its 31st day.
The Ministry of Health in Gaza counted about 10,000 martyrs since the beginning of the Israeli aggression, and confirmed that 70% of the victims of the aggression were women and children, in addition to more than 24,000 injured people.