Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Gaza Ministry of Health: Direct threats to residential areas surrounding hospitals are part of "Israel’s" systematic plan targeting the healthcare system
Gaza Ministry of Health: We renew our urgent appeal to the relevant authorities to intervene and protect healthcare institutions
Gaza Ministry of Health: We warn against reaching the point of a complete collapse of the healthcare system in the southern part of the Strip
Gaza Health Ministry: Nasser Medical Complex in Khan Younis going out of service would lead to a humanitarian disaster with unpredictable consequences
Palestinian sources: Several displaced Palestinians were reportedly injured after being targeted by occupation forces while waiting for aid west of Rafah
Israeli media: A senior European Union official hinted that 'Israel' would be held accountable for violating international law in Gaza
Al-Qassam Brigades spokesperson Abu Obeida: The losses incurred by the occupation today in Khan Younis and Jabalia are an extension of a series of top-tier operations
Al Mayadeen's correspondent in South Lebanon: The invading Israeli force is digging a trench and erecting earthen berms, amid detected activity suggesting preparations to install espionage equipment
Al Mayadeen's correspondent in South Lebanon: An Israeli force breaches the "technical fence" in the Wazzani area
Israeli media: 4 Israeli soldiers killed in the Gaza Strip

Israeli economy threatened with additional burdens amid war on Gaza

  • By Al Mayadeen English
  • Source: The New York Times
  • 20 Oct 2023 20:05
4 Min Read

The Bank of "Israel", led by Governor Amir Yaron, has already allocated $30 billion in foreign exchange to bolster the shekel, which has reached an eight-year low.

  • x
  • A billboard welcoming US President Joe Biden who arrived on a visit to Palestine to express solidarity with
    A billboard welcoming US President Joe Biden who arrived on a visit to Palestine to express solidarity with "Israel", Oct. 18, 2023 (AP)

Writer Liz Alderman wrote in an article for The New York Times that the current war on Gaza is threatening to bring about widespread "regional instability", with potentially severe economic consequences alongside the already devastating human toll.

"Israel's" economy, which was considered "robust and entrepreneurial" until recently according to Alderman, is now faced with serious challenges.

The Palestinian economy was in a precarious state even before "Israel" imposed a siege on Gaza in response to the October 7th operation, leading to what the World Health Organization termed a "humanitarian catastrophe."

The IMF's assessment this year highlighted that "Israel's" blockade of Gaza and increased restrictions on the West Bank were severely detrimental to economic growth and private sector development.

Read more: Israeli economy continues to deteriorate as Al-Aqsa Flood proceeds

On another note, the mobilization of up to 360,000 Israeli reservists for military service has caused parts of the economy to come to a standstill.

The technology industry, which has been a key driver of growth, has experienced a sudden slowdown, and production at a major offshore natural gas field has been halted. To prevent the Israeli shekel from collapsing, the central bank has committed billions of dollars.

"Israel's" economy was once hailed as the fourth-best-performing in the OECD. The start-up sector attracted substantial foreign investments, and the 2020 Abraham Accords held the promise of increased economic growth. 

But this year saw a stumble in the economy due to Prime Minister Benjamin Netanyahu's plans to curtail the judiciary's powers. This move prompted significant public protests, with many tech leaders threatening to leave.

The judicial overhaul also resulted in a steep 60 percent drop in foreign investment, contributing to a devaluation of the shekel, volatile fluctuations in the Israeli stock market, and challenging economic conditions marked by high-interest rates, rising inflation, and concerns about a global economic slowdown.

Read more: Fighters of the Resistance Axis will go down in history: PFLP

Related News

Conference to recognize Palestinian state shifts to gradual steps

US weighs $500 million for GHF amid aid controversy: Reuters

This week, two credit rating agencies issued warnings about the potential downgrade of "Israel's" debt. On Friday, Moody's described the current conflict as more severe than previous instances of violence, which could divert resources in the economy, reduce investment, and erode confidence.

Fitch, on Tuesday, raised concerns about an increased risk of the conflict expanding into large-scale, prolonged military confrontations with multiple actors, a stark contrast to its assessment of "Israel's" strong economic growth just six months ago. A rating downgrade might result in higher interest rates for "Israel's" borrowing.

However, Goldman Sachs noted on Monday that, for the time being, the risks to "Israel's" financial and economic stability seemed lower than during previous major conflicts. They attributed this to "Israel's" stronger overall finances and its substantial foreign exchange reserves, which amount to around 40% of the country's GDP.

The Bank of "Israel", led by Governor Amir Yaron, has already allocated $30 billion in foreign exchange to bolster the shekel, which has reached an eight-year low.

The POS Netanyahu and his criminal ZIONIST cronies have been getting their money out of Israel in advance of their planned genocide of the Palestinians.

This HUGE drop in Shekel v $ indicates big outflows from Israel since Jan 1 2022-today. pic.twitter.com/IPVkz9kpfX

— Dr.SHIVA Ayyadurai, MIT PhD. Inventor of Email (@va_shiva) October 19, 2023

Read more: Mass rallies, protests around the world in support of Palestine, Gaza

On the other hand, Palestinians in Gaza and the West Bank have long suffered economic hardship, and the recent siege of Gaza has only worsened their plight.

The IMF's annual review in August highlighted the significant economic challenges faced by the Palestinian people, including persistent poverty and high unemployment.

"Israel's" siege of Gaza following the Hamas operation on October 7th has resulted in severe infrastructure damage, critical shortages of food, water, gasoline, and other essentials, and the displacement of approximately half of Gaza's over two million residents.

There is concern that an expansion of the conflict to include Hamas's ally, Hezbollah in Lebanon, could exacerbate regional hardships.

Read more: US 'monstrous disregard for Palestinian lives': Voices from within

Various Israeli sectors, including tourism and transportation, have already been significantly affected, and even tech companies are facing disruptions. Natural gas investments in the region may also suffer, impacting "Israel's" plans to become a gas export hub.

"Israel's" central bank governor expressed optimism about the regime's ability to recover from difficult periods. But the presence of numerous reserve soldiers on the front lines and civilians taking shelter due to rocket attacks will undoubtedly impact economic activity, he says. 

  • war on Gaza
  • shekel
  • Israeli economy
War on Gaza

War on Gaza

Most Read

Lebanon's PM Nawaf Salam meets with US envoy Morgan Ortagus in Beirut on April 5, 2025 (Dalati Nohra via AP)AP)

Morgan Ortagus to exit US role in Lebanon amid policy shift

  • Politics
  • 1 Jun 2025
A Palestinian woman mourns as she embraces the body of her daughter Mayar Abu Odeh, 8, who was killed in an Israeli army strike on Gaza. at Al-Shifa Hospital in Gaza City, Wednesday, June 4, 2025. (AP)

French port workers block arms shipment to 'Israel' amid Gaza genocide

  • Politics
  • 4 Jun 2025
New Syrian group claims Golan strike, vows resistance to 'Israel'

New Syrian group claims Golan strike, vows resistance to 'Israel'

  • Politics
  • 4 Jun 2025
Palestinians struggle to get donated food at a community kitchen in Khan Younis, southern Gaza Strip, Monday, June 2, 2025. (AP)

Boston Consulting Group withdraws from GHF

  • Palestine
  • 3 Jun 2025

Coverage

All
War on Gaza

Read Next

All
https://english.almayadeen.net/news/politics/pentagon-chief--nato-likely-to-back-trump-s-5--defence-spend
Politics

Europe spent $3 trillion on defense, but got little in return - FT

Power, parties, and scandal: Trump’s ties to Epstein: Telegraph
Europe

Power, parties, and scandal: Trump’s ties to Epstein - The Telegraph

Eilat port as seen from the sea, occupied Palestine, March 12 2009 (wikimedia commons)
Politics

YAF operations forced 80% plunge in Eilat port revenues in 2024

EU backs International Criminal Court after US sanctions judges
Europe

EU backs International Criminal Court after US sanctions judges

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS