CNN report: Israel is paying a high price for aggressive behavior
Last Updated on October 5, 2024 9:35 am
Before the ongoing war in Gaza, the International Monetary Fund (IMF) predicted that Israel’s GDP would grow by 3.4 percent in 2024. However, that forecast was later revised down to 1 percent to 1.9 percent.
Despite a nearly year-long massacre in besieged Gaza and another downgrade of Israel’s credit rating, Israeli Finance Minister Bezalel Smotrich claimed in late September that the economy was under pressure but still stable.
“Israel is bearing the brunt of the longest and costliest war in its history,” he said.
In this regard, the former governor of the Israeli central bank, Karnit Flug, told CNN, “If the war intensifies, it will have a greater impact on economic activity and growth.”
The ongoing war has left the situation in Gaza in dire economic and humanitarian terms. In the wake of Israeli aggression, the West Bank of Palestine is also facing rapid economic decline.
Meanwhile, due to the border conflict with Hezbollah, Lebanon’s economy may shrink by 5 percent this year, according to BMI, a market research firm owned by Fitch Solutions.
On the other hand, according to a report of the Central Bank of Israel, the cost of the ongoing war may reach about 66 billion dollars. This includes military costs and housing costs for displaced Israeli citizens. And this cost is about 12 percent of Israel’s GDP.
Smotrich, however, said Netanyahu’s government would restore his country’s economy. But economists worry that the damage from the ongoing war will be long-lasting.
In this regard, the former governor of Israel, Flug said, if the investment for the war is reduced, the growth may decrease further.
Meanwhile, a study by the National Security Studies Institute of Tel Aviv University said that if the Israeli government completely withdraws its army from Gaza and Lebanon, the country’s economy will reach a weaker position.
According to Israeli media sources, Israel’s borrowing costs have increased and the government has to borrow at high interest rates. Because investors are looking for higher returns on Israeli bonds and other assets. As a result, Israel’s economic situation is worsening due to mounting debt and budget deficits.
Meanwhile, the technology, agriculture, construction and tourism sectors have also been heavily affected by the ongoing war in Gaza and Lebanon. Source: Al-Mayadin