Israeli economy at risk as 'Israel' continues its war on Gaza

By Al Mayadeen English
Source: News websites
5 Dec 2023 16:19
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Israeli companies are facing shortages across the board due to the deployment of about 300,000 people, or 8% of the workforce, for military service.

An undated photo of a man holding Israeli Shekel. (AFP)

Bloomberg recently reported that "Israel's" entry into the wartime economy has left businessmen struggling to sustain their economic activities. The news agency reported that Israeli companies are facing shortages across the board due to the deployment of about 300,000 people, or 8% of the workforce, for military service.

The collapse of budgetary spending due to the war has severely impacted entertainment companies, and mass evacuations from war-affected areas in northern and southern occupied Palestine have increased economic disruptions.

The report stated that 57,000 Israeli companies will close their doors this year, compared to 42,000 companies in 2022, due to the damage caused by rising rates, inflation, and months of political unrest resulting from judicial amendments and protests, according to a survey conducted by "Coface BDI" for the Israeli business daily The Marker.

Bloomberg also noted that the Israeli economy usually adds 4,500 companies annually, but the total will decrease by 20,000 this year.

The entity's top five banks have increased credit loss provisions for small businesses by about eight times compared to last year, according to the agency's information.

Israeli economy sees regression

In a survey conducted by the Central Bureau of Statistics in "Israel" which was released last month, it was found that around 50% of Israeli companies experienced a significant drop in their revenues amid the aggression on Gaza. Notably, the construction and food services sectors were the hardest hit, with more than 70% of the surveyed companies reporting a revenue decrease of over 70%.

Small businesses were particularly hard hit, and "Israel" faced a shortage of workers as hundreds of thousands of Israelis were called up for reserve military service. About 11% of companies stated that 21% of their workforce had been called up for military service.

Earlier, French newspaper Le Monde discussed the economic disruptions faced by the Israeli economy due to the aggression on Gaza, highlighting a crisis in the Israeli technology sector.

Furthermore, Britain's Financial Times reported that economists anticipate a significant contraction in the Israeli occupation's economy and a substantial government deficit, with increasing concerns about a long-term war.

The newspaper added that "Israel’s" bars and restaurants were forced to close, and hundreds of flights were canceled in the wake of Operation Al-Aqsa Flood.

The Financial Times had previously mentioned that traders increased their bets against the Israeli shekel, putting pressure on the Bank of "Israel" to keep interest rates unchanged and stabilize the currency, despite the looming cost of the war on the economy.