Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Bloomberg: Israel’s War Gives Economy Covid-Like Shock

Fri 24 Nov 2023 | 03:18 AM
Taarek Refaat

The financial shock is rippling through the economy, which was forced to shift to a war economy within days, shocking Israel and leading to retaliatory strikes followed by a ground attack on Gaza, giving its economy a Covid-like shock, according to Bloomberg.

An official in the Israeli Ministry of Finance as saying that his country will face a growing budget deficit over the next two years, which may reach 9% of its gross domestic product.

The Israeli budget deficit reached 2.6% of GDP in October, and according to the official, the total deficit is expected to rise to about 9% over the next two years.

The Israeli Bureau of Statistics had previously said that the unemployment rate rose to about 10% in October after the war on Gaza.

Bloomberg quoted a consulting company as saying that the Israeli government's spending on the military operation in the Gaza Strip will reach $48 billion.

According to estimates by Leader Capital Market, a consulting company, “The war will cost Israel’s budget about 180 billion shekels ($48 billion) in 2023-2024, and Tel Aviv will bear two-thirds of the total costs, while the United States will pay the rest.”

Bloomberg also indicated that the continuation of hostilities costs Israel's budget about $270 million per day.

The credit rating agency Standard & Poor's published a special report on the Israeli economy in which it lowered its expectations for Israel's rating from "stable" to "negative."