Governor of the Bank of Israel (Central Bank), Amir Yaron, warned that war expenses would reach… Gaza strip To 255 billion shekels ($68 billion).
And transfer The Knesset (Parliament) The Israeli Parliament reported that Yaron told the Parliamentary Finance Committee, yesterday, Monday, that direct war expenses for the years 2023-2025, including compensation and other civilian expenses related to the war, will reach 215 billion shekels. He added that Israel It loses tax revenues worth 40 billion shekels.
Regarding the levels of expected economic growth, the Governor of the Bank of Israel stated that he expects the growth rate for the years 2023-2024 to be around 2% each year. He said that in 2025, the growth rate is expected to reach 5%. This is what was stated in the forecast scenario, which indicates a decline in combat operations (the war on Gaza) during the first quarter of 2024.
The Bank of Israel estimates indicate that the economy will grow by only 1.5% in 2023, and its data is expected to be released by next month, and with the addition of the natural increase in population, the economy will practically witness zero growth.
While the Bank of Israel data indicated economic growth in 2024 at the level of 3.4%, which is the same as expectations International Monetary FundPost-war forecasts indicate growth of 0.4% this year.
Risk and uncertainty
Yaron added, “We expect the moderation to continue.” InflationBut there is a lot of uncertainty around that, such as the events on the northern border with Lebanon, “and that is why we must take deliberate and calculated steps.”
He continued that inflation risks are linked to the housing market, and if the supply of apartments is not increased, through foreign workers or the return of a portion of Palestinian workers, it is likely that there will be an increase in prices. If there is a wave of high prices in the agricultural sector, this will be reflected in the food market.
He stated that Israel entered the war and was doing well financially, noting that Israel had a good experience with the issue of emerging from previous security events.
He considered that global trade is currently below average and it is affecting Israel, explaining that there is an increase in transportation costs due to what is happening in The Red Sea And threats Houthi group Yemeni vessels for Israeli ships or those transporting goods to Israel.
Since October 7, 2023, the Israeli occupation has been waging a devastating war on the Gaza Strip, causing the death of more than 25,500 Palestinians and the injury of more than 63,000 others, most of them children and women, in addition to massive destruction of structures and an unprecedented humanitarian catastrophe.