Israeli economy to shrink 2% as workforce is displaced, drafted
4 Min Read
As 20% of the Israeli workforce is either unemployed or drafted, the Israeli economy is expected to see major hits in the upcoming quarter.
-
An Israeli policeman displays counterfeit 100 Israeli Shekel bills, July 7, 2013 (AP)
The Israeli economy, according to forecasts, is expected to shrink by 2 percent in the concluding economic quarter of the year.
Since the mark of the war on Gaza, workers have been drafted to serve with the Israeli occupation forces, marking a drastic economic stump for "Israel". Before the war, only 3% of the workforce was missing from labor markets. The statistic saw a 17% jump following October 7, according to the Taub Center for Social Policy Studies, an Israeli think tank.
Consequentially, 20% of the Israeli workforce, or 900,000 Israelis, are now either enlisted in the IOF, unemployed at home, fled from settlements where attacks have been concentrated, such as by the borders of Lebanon and Gaza, or are unable to work due to the destruction of their work industry.
Although negative estimates of Israeli economic growth have been a concern for the occupation, accounting for the material losses it has experienced, as well as the drastic cost of war, the "Bank of Israel" projected an ambitious 2% growth, referencing previous wars and the Covid-19 epidemic that did not affect the economy as expected. However, different sources claimed that if the Israeli economy were to see growth, it would roof at 0.5%.
“The wide range of projections that we are seeing comes from some of the different assumptions about how long and how intense the fighting will be,” said the vice president of research at the "Israel Democracy Institute" and a former governor of the "Bank of Israel," Karnit Flug.
On Sunday, the Taub Center revealed that almost 200,000 Israelis filed for unemployment compensation since October 7.
Moreover, around 300,000 Israelis were drafted as reservists, 139,000 of whom were withdrawn from the workforce. This signifies the second-largest reserve draft in the occupation's history, the first being during the Yom Kippur War.
The occupation government had delivered aid to reservists who had to leave their jobs, but benefits have been slower than anticipated.
The Taub Center also revealed that a fifth of workers at larger companies (100 employees and more), which employ more than half the Israeli workforce, have been called for duty.
Labor shortages have also been significantly centralized in three different sectors: tourism, construction, and agriculture. The workforce of the latter two industries is predominantly Palestinian. Since "Israel" prohibited Palestinians from entering occupied territories, barely any workers were left to do the job.
Read more: Report details Israeli economic 'losses' due to war on Gaza, West Bank
Economic disaster, unpayable debt
The chairman of the Israeli government's oversight committee and member of the Knesset, Mickey Levy, warned that the occupation entity is "facing an economic catastrophe" under the government of Israeli Prime Minister Benjamin Netanyahu.
Talking to the Israeli Maariv newspaper, the senior official said that the "government budget has become a plundering budget," criticizing Netanyahu's actions as "ridiculous and frightening."
Providing more details, Levy explained that the Israeli government has inserted "illogical" issues in the 2023 budget, such as allocating over 600 million shekels to bolster "Jewish identity and culture," questioning whether "identity awareness" required such spending.
Furthermore, he added that there are "unnecessary ministries in the government," noting that in the past, there were fewer than 30 ministers, but now there are 38 ministries, at least 10 of which are non-essential.
"At a time when every shekel is supposed to go towards war efforts, in this government, no one seems to care," added the Knesset member.
In this context, Levy predicted that the 2024 budget would be even worse, with "future generations" continuing to bear the burden of debt that they will not be able to escape.
