Israeli GDP growth expected to shrink 1%; debt-to-GDP ratio above 65%
2 Min Read
Central bank governor Amir Yaron admits that the costs of war on Gaza have been larger than projected.
-
Israeli settlers outside an Israeli bank Hapoalim in al-Quds on May 1, 2020 (AFP)
Due to the prolonged aggression on Gaza, "Israel's" economy is predicted to contract by around 1% this year, and the country's debt to GDP ratio is predicted to surpass 65%, central bank governor Amir Yaron stated on Thursday.
In a live-streamed discussion regarding monetary policy, Yaron stated, "Assuming the war is primarily concentrated in the southern border, and lasts till the end of this year, GDP growth is likely to shrink by about 1% in 2023."
Furthermore, Yaron predicted that by the end of 2024, "Israel's" debt-to-GDP ratio will probably surpass 65%, since "the costs (incurred by the war) are larger than it was initially projected."
The Israeli Finance Ministry announced on Wednesday that the occupation's budget deficit for October was 22.9 billion shekels ($6 billion), citing an increase in costs associated with financing "Israel's" war on the Gaza Strip.
The deficit for the previous 12 months increased from 1.5% in September to 2.6% in October as a percentage of GDP.
Ongoing and wide-ranging confrontations in the Middle East could set in motion a global recession, two of Wall Street's biggest names have warned.
Larry Fink, the chief executive of Blackrock, the world's largest asset manager, stressed that geopolitical instability will lead to a withdrawal in consumption, aggravating the risk of European and American recession.
"Geopolitical risk is a major component in shaping all our lives. We are having rising fear throughout the world, and less hope," Fink explained to the Sunday Times.
Fink pointed to the Israeli aggression on the Gaza Strip and the war in Ukraine as two of the main factors that have influenced the global economy.
"Rising fear creates a withdrawal from consumption or spending more. So fear creates recessions in the long run, and if we continue to have rising fear, the probability of a European recession grows and the probability of a US recession grows."
