Jerusalem– The cost of war has come back Gaza strip To the agenda, after the official announcement of the Israeli Ministry of Finance, that the war in the first 3 weeks cost the general budget 30 billion shekels ($7.5 billion), which does not include the losses of small and medium business interests, and the direct and indirect damages incurred by economic activity.
During a press conference, the head of the Budget Division in Finance, Yogev Gerdos, revealed, on Wednesday evening, the Ministry of Finance’s estimates regarding the enormous damage caused by this war on the state budget, according to what was reported by the Hebrew newspaper Calculist.
Gerdos stated that – in the three weeks of the war – the damage to the budget amounted to 30 billion dollars, distributed as follows: 20 billion shekels ($5 billion) for the cost of weapons and war, 10 billion shekels ($2.5 billion) to finance the evacuation of the population and support the local authorities, indicating This cost does not include the direct damage incurred by the Israeli economy after the operation “Al-Aqsa flood“ AWhich was launched by the Palestinian resistance led by Izz al-Din al-Qassam Brigades The military wing of the Islamic Resistance Movement (agitation) Which was estimated to have a minor impact on the Israeli economy.
Expenses and losses
According to Gerdos, the fighting expenses per day cost about one billion shekels ($250 million), and the total spending will increase as the fighting continues.
The Finance Ministry estimated that the damage to the economy’s GDP amounts to about 10 billion shekels per month from the fighting ($2.5 billion), meaning that growth in Israel will slow significantly for the remainder of the year.
Gerdos said that the costs of the current war on Gaza are enormous compared to previous rounds of combat, and “we need to act responsibly. It seems that the war will continue for a long time, and we do not want to receive a financial and economic blow as well.”
For his part, Finance Minister Bezalel Smotrich raised the budget deficit for the current year to 4% instead of 1.5%, and to 5% in 2025.
Smotrich added, “We are building a new budget for 2024 and will introduce a series of structural reforms that support growth, with the aim of strengthening the economy during the fighting and certainly after it. The deficit will be larger, but it will happen once,” according to what the economic newspaper “De Marker” quoted him as saying.
Recession and unemployment
These official data come amid the state of recession that has afflicted the Israeli economy, the labor market, and the transactions of various commercial interests, since the “Al-Aqsa Flood” battle carried out by the Palestinian resistance against the Israeli occupation on October 7 last.
The Israeli Central Bureau of Statistics stated on Thursday that the surveys it conducted showed that the war on Gaza affected commercial activity, which was almost completely paralyzed, as well as the labor market and movement, as 764,000 workers are still unemployed, equivalent to 18% of the total. The workforce, noting that this number is the minimum and could reach about one million workers.
According to data published by the Ministry of Labor today, hundreds of thousands of workers have been laid off from their jobs due to the damage to various industries and because of the call-up of army reserve forces to the war, and this places a great burden on the “war economy” and the compensation plans that the finances are preparing, according to the “Globes” economic newspaper. .
Work and unemployment
The unemployed due to the war are divided into 4 groups:
Reserve soldiers Their number is estimated at 360 thousand.
Residents of the “Gaza envelope” and the northern border Those who were evacuated from their homes, many of whom cannot work because of this, and their number is estimated at 127 thousand people.
As for The third group is parents of children under 10 years oldwho are forced to reduce or abandon work during this period due to one of the spouses conscripting into the reserve forces, and the suspension of studies in some parts of Israel.
The Ministry of Labor assumes that among 30% of families with children under the age of 10, one of the spouses has stopped working, which means that 183,000 people are unemployed.
The last group are industries that stopped partially or completely due to the war. Such as construction, entertainment, retail, sports and travel. The number of unemployed workers for this group is estimated at approximately 319 thousand people.
All of this, of course, is limited to Israeli workers only, according to the Globes newspaper, and does not include foreign workers whose activities have also been affected. This is a large proportion of the workforce, but less dramatic than at the height of the Corona crisis.
As for the losses incurred by medium and small businesses during the 3 weeks of the war, the Central Statistics Department survey showed that estimates of 51% of businesses lost more than half of their revenues last October compared to their monthly revenues during the current fiscal year.
The reports of managers in commercial departments reflect the state of employment and the damage to their companies and businesses during the war, explaining that 37% of the total companies and businesses in Israel reported the minimum level of employment and employment.
Losses regarding the impact of the war on the labor market and the greatest damage were recorded in the southern region, where about 59% of companies and interests reported the minimum level of employment, noting that 62% of companies operating in real estate and construction are active with the minimum level of employment.