Bloomberg on Friday reported that "Israel's" economy is under growing strain as the genocide in Gaza shows no signs of ending, with businesses and workers increasingly feeling the consequences of a war that has devastated Palestinian life and livelihoods.

For nearly two years, repeated military call-ups have left companies short-handed. Nimrod Vax, co-founder of the data-intelligence firm BigID, said at one point 20% of his company's 600 employees, a quarter of them in "Israel", were serving in the IOF. "There's been a noticeable impact on our long-term projects and on research and development," he said. "Key talents were away."

The mobilization of up to 130,000 reservists, roughly 3% of the workforce, has hit small and medium-sized businesses particularly hard. Ron Tomer, president of the Manufacturers Association of Israel, observed, "If you're a small business, a few absences can imminently shut you down."

Isolation and Ruin

But while "Israel's" economy contracts, the far greater collapse is unfolding in Gaza and the West Bank. Under constant bombardment, siege, and mass displacement, the World Bank has described the Palestinian economy as suffering "its deepest contraction in over a generation."

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According to Gaza's Health Ministry, more than 65,000 Palestinians have been killed since October 2023, in what human rights advocates and many governments now openly describe as genocide. The destruction of homes, hospitals, schools, and farmland has erased any semblance of normal economic life for Palestinians.

The war is also isolating "Israel" internationally. The EU, its largest trading partner, has considered suspending preferential trade treatment, while France and Saudi Arabia are pushing for broader recognition of a Palestinian state. Israeli exporters, especially in tech and defense, now report that European clients are wary of public association, forcing discussions to happen behind closed doors.

Read more: 'Israel's' markets tumble as Gaza genocide fuels global backlash

Self-inflicted collapse

Markets have reflected the pressure. Tel Aviv stocks slumped after Prime Minister Benjamin Netanyahu declared that "Israel" must become more self-sufficient as the war deepens the occupation's isolation. Though he later walked back the remarks, investors remain nervous about the economic and diplomatic fallout.

For individuals, the economic burden is increasingly visible. Yaniv Ptaya, a Chinese medicine practitioner, was drafted three times and spent more than six months away from work, eventually shutting one of his clinics. Meanwhile, Or Epstein, co-founder of Wonder Robotics, juggles night shifts in his military unit with his civilian job. "I'll report," he said of another deployment, "because of my sense of duty, but also because I've learned to combine both."

As "Israel" faces a 7% economic shortfall compared with pre-war forecasts, a blow comparable to the 2008 financial crisis, Palestinians in Gaza are enduring mass death, famine conditions, and economic annihilation. 

Many observers argue that "Israel’s" economic wounds are self-inflicted, the direct result of sustaining a war widely regarded as genocidal.