'Israel’s' economic growth revised down as war escalates
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The Finance Ministry and Central Bank recently reduced "Israel's" estimated annual GDP growth rate for 2024 to 1.1% and 0.5% respectively.
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Israeli occupation forces (IOF) carry the coffin of a sergeant killed by a Hezbollah drone attack in occupied territories on October 14, 2024. (AP)
"Israel" lowered second-quarter growth as the protracted war on Gaza and Lebanon continues to weigh heavily on the occupation's economy than originally estimated.
Gross domestic product increased by an annualized 0.3% in seasonally adjusted terms in the three months through June, according to the Central Bureau of Statistics' third and final review, published Tuesday. The previous two estimates released in August and last month indicated growth rates of 1.2% and 0.7% respectively.
The amount was reduced mostly owing to a shift in government consumption, which is now up 5.3% for the second quarter, compared to 8.2% in the earlier forecast.
The Finance Ministry and Central Bank recently reduced "Israel's" estimated annual GDP growth rate for 2024 to 1.1% and 0.5%, respectively. S&P Global Ratings predicts a 0% growth rate, according to a recent announcement, and has downgraded "Israel's" credit rating to A by one notch.
Exports, excluding diamonds and startup enterprises, fell for the third quarter in a row, contributing significantly to the downturn. Fixed-asset investments have stalled and are now forecast to be somewhat lower than originally projected.
The construction downturn has contributed significantly to the decline in fixed investments. The sector depends on Palestinian laborers from the West Bank, who have been prevented from entering occupied territories since the war began.
Last week, Israeli Finance Minister Bezalel Smotrich acknowledged that the ongoing "war is the longest and most expensive war in Israel’s history," with direct costs amounting to approximately 250 billion shekels ($66.6 billion) so far.
He further emphasized that this figure is likely to increase, stating, "We will all feel the need to finance this war, and it will not be easy for us."
Big investors 'abandon' Israeli real estate sector: Globes
Investors who purchase substantial numbers of apartments in the Israeli-occupied territories are "abandoning" the Israeli real estate market, according to a survey conducted by the Israeli Ministry of Finance's chief economist.
Previously, such investors made up the majority of those purchasing settlement units and apartments, however, in August they made up only 33% of all investors who made such transactions.
Reviews conducted by the ministry’s chief economist and the Israeli Central Bureau of Statistics found that real estate deals fell by 16% this month. Moreover, the chief economist said that 1,200 apartments were bought in the past year every month, a figure that amounts to half of the monthly number of apartments bought on average in 2021, underlining the severity of the crisis.
In February this year “heavy investors” had a 72% share of the market, however, the number dropped to 35% in August.
Israeli news website Globes explained that the drop could be attributed to “uncertainty in Israel’s economy.”
Another explanation could be that investors do not believe that apartment prices will rise due to the ongoing wars launched by the Israeli regime and their subsequent effects on the Israeli economy, according to the report.
