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BREAKING
Factions' statement: The attendees agreed to support and continue implementing the ceasefire agreement measures, including the withdrawal of the occupation and lifting the siege.
Factions' statement: Calling for an end to all forms of torture and violations against prisoners in occupation prisons and the necessity of obligating the occupation to do so.
Statement: The current moment is crucial, making the meeting a true turning point toward national unity in defense of our people and their right to life, dignity, and freedom.
Factions' statement: Call for an urgent meeting of all Palestinian forces and factions to agree on a national strategy.
Factions' statement: Continuing joint work to unify visions and positions to confront the challenges facing the Palestinian cause.
Statement of the factions: Emphasis on the unity of the Palestinian political system and the independent national decision.
Statement: Approval to establish an international committee to oversee the financing and implementation of the reconstruction of the Gaza Strip.
Statement: The committee is responsible for managing life and services in cooperation with Arab brothers and international institutions, based on transparency and accountability.
Resistance factions' statement: Agreement to hand over the administration of the Gaza Strip to a temporary Palestinian committee of independent technocrats.
Al Mayadeen's correspondent: Two people martyred in the Israeli airstrike that targeted a vehicle in Toul.

War with Hezbollah would be 'nightmare scenario' for Israeli economy

  • By Al Mayadeen English
  • Source: The Economist + Agencies
  • 25 Sep 2024 14:30
  • 2 Shares
4 Min Read

The Economist reports that clients of the three largest Israeli banks have recorded a sharp increase in clients requesting to transfer their savings abroad.

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  • War with Hezbollah would be 'nightmare scenario' for Israeli economy
    Fires burn as a result of rockets and drones launched by the Resistance Lebanon toward Israeli settlements in northern occupied Palestine, on June 3, 2024. (AFP)

In a recent analysis, The Economist highlighted that a full-scale war between "Israel" and Hezbollah represents a "nightmare scenario" for the former's economy, with a number of investors already preparing for a war that would "engulf Israel".

According to the report, such a war would severely damage Israeli economic growth, possibly even more than the impact of the Palestinian Resistance's October 7 operation.

Read more: 'Israel' no longer top destination for millionaires

A war-time economy is precarious, requiring a government to finance its military, usually through deficit spending, while maintaining enough economic strength to manage post-war debts, the report added.

However, the most alarming scenario today facing the occupation entity is that the war would extend into its key commercial centers, including Tel Aviv. Even a more limited military escalation in the northern regions could push the Israeli economy to the brink, it warned.

Military expenditures are expected to rise significantly, placing further strain on the entity's financial resources.

Adding to these challenges, Israeli banks are facing a substantial outflow of capital, as investors seek to move their funds abroad.

The three largest banks in "Israel" have reported a sharp increase in the number of clients requesting to transfer their savings abroad.

Read more: One year into war on Gaza, 'Israel' grapples with upper echelon exodus

This development has heightened concerns among the entity's economic policymakers, who are now more worried than they were at the outset of the war.

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Even the Israeli Finance Minister is offering a gloomy outlook, “We are in the longest and most expensive war in Israel’s history.”

"Previous conflicts have ended in economic disaster for Israel. Do not be surprised if this one does, too," the report concluded.

Qader 1

In response to the ongoing Israeli aggression Lebanon launched on Monday, which has so far resulted in the killing of around 560 people and the wounding of more than 1,800 others, Hezbollah upscaled its operations in the past few days.

Including in its recent statements the phrase "in defense of Lebanon," the Resistance group launched strikes on key Israeli military bases and settlements, expanding the scope of its operations. This escalation led to an increased fleeing of Israelis from northern settlements and forced businesses in the region to close or suspend operations.

For the first time ever, the Resistance targeted on Wednesday the suburb of Tel Aviv, forcing hundreds of thousands of settlers to shelters.

Hezbollah unveiled in a statement the Qader 1 ballistic missile, announcing that it was used to strike the Mossad command center responsible for the pagers and two-way radios terrorist attack and the assassination of the Resistance group's leaders.

The command center is based in the suburbs of Tel Aviv, Hezbollah confirmed in its statement.

'Dying out one after the other'

The Israeli economy had already shown major signs of weakness before October 7, but the situation was exacerbated when Operation Al-Aqsa Flood and the subsequent genocidal war crashed the occupation. 

During the fourth quarter of 2023, the Israeli GDP contracted by 21%. Despite making a 14% recovery in the first quarter of 2024, growth slowed and stood at 0.7% for the second quarter, prompting economists such as Jacques Bendelac to warn of possible recession if the war does not soon cease.

In this context, Fitch Ratings, a capital market company, forecasted in August that the Gaza war—now the longest since 1948—could potentially extend into 2025. Israeli economy also faces the threat of a multi-front war as aggression on the northern front with Lebanon escalates. 

Three major ratings agencies, including Fitch, downgraded Israeli debt, possibly indicating that "Israel" could not close off its obligations, although credit ratings still remained high.

"Israel's" primary growth sectors are technology and the arms industry, both of which were exempt from the risks of war to a certain extent. However, other key areas such as tourism, construction, and agriculture were dealt heavy blows and are "dying out one after the other," Bendelec said. 

  • Palestine
  • Al-Aqsa Flood
  • Israel
  • Israeli economy
  • Hezbollah
  • Lebanon
  • Gaza

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