Experts on economic issues have reviewed the consequences of the Al-Aqsa storm operation on the already struggling Israel economy.
Experts and analysts of economic issues, while reviewing the outcome of the Al-Aqsa Storm operation against Israel, have declared huge losses for the country and termed it as unbearable for the already struggling Israel economy.
Gad Lior, Israeli economic issues correspondent at the Yediot Aharonot newspaper, writes that the war with the Gaza began at a time when the Israeli market was looking for a decisive decision regarding the growth of banking investments.
The Al-Aqsa Storm operation has been launched by the Palestinians at a time when the Israeli currency (shekel) was falling against the dollar and other foreign currencies, and the Tel Aviv Stock Exchange also suffered a loss in its value for the fourth consecutive day.
Lior predicted that the value of the shekel would continue to fall against the dollar as the war on the Gaza front deepened and that the value of shares on the Israeli stock market would fall.
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This expert on Israeli economic issues did not consider it unlikely that the stock exchange would be closed if its value continued to fall, and he predicted that the Israeli economy would thus suffer extensive losses, which could not be accurately estimated at current levels.
With the outbreak of war in Israel, education has been halted from Tel Aviv to the border areas of the Gaza Strip.
Hundreds of industrial sectors, considered the backbone of the Israel economy, have been shut down, Israel’s internal front announced. Commercial facilities and markets have been closed.
This expert on economic issues estimated the billions of dollars of losses suffered by Israel in the economic, commercial and tourism sectors in previous conflicts with Palestinian groups, and predicted that the current war will cause financial damage and public budget deficits.
“Matans Shahadeh”, an expert in political economy, also said that the Al-Aqsa storm operation would have a direct economic impact on Israel, especially its southern regions.
He stressed that the extent of these damages will be determined as events progress, but economic activities in the south of Israel have been completely shut down and activities in the capital are also affected by Palestinian rocket attacks.
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This expert on economic issues also predicted that the cabinet will close the stock market to prevent stocks from falling.
Palestine’s Al-Aqsa campaign has dealt a blow to the Israeli economy at a time when Samuel Abramson, the Chief Economist of the Israeli Finance Ministry, while presenting a report last September, had announced that in the first quarter of 2023, Foreign investment in Israel has decreased by 60% compared to 2020 and 2022.
Moody’s credit rating agency also triggered concerns about the Israel economy after it announced last August that the government planned to reform the judicial system.
The Organization for Economic Co-operation and Development also predicted that the growth of the Israel economy would decline from 3% to 2.9%.
Israel economy shocked, Tel Aviv Stock Exchange fell 8%
The Tel Aviv Stock Exchange fell 8 percent at the end of trading on Sunday, the first day of trading after the start of Operation Al-Aqsa Storm, launched by Palestinian groups in the Gaza Strip against Israel.
According to Israel Stock Exchange data, the Banking index declined 8.7%, Construction 9.52%, Insurance 9.38%, Investment 9.2% and Energy 9.22%.
The fall comes a day after Palestinian groups in the Gaza Strip announced the beginning of the military operation “Al-Aqsa Storm” against Israel, which resulted in the deaths of hundreds of Israeli soldiers and injuries to more than two thousand others. And dozens of others were taken prisoner.
Investors on the Tel Aviv Stock Exchange faced weak trading this year due to the judicial reform plan and steps taken before it was approved by the Knesset (parliament). Therefore, the current developments have put more pressure on the market.
Uri Greenfield, chief strategist of the investment company Pesagot Israel, said in an interview with the specialized Israeli website “Marker” that various operations in the south of Israel in recent years have not had much adverse effect on the country’s economy.
But it seems that this war that has started will have a greater impact on the Israel economy and local markets may struggle to recover.
Greenfield estimates that the expected damage to Israel’s economic activity will occur through two channels: first, the Gaza war will likely continue for a long time, during which a large part of Israel will remain under missile threat, leading to a decline in consumption.
He added: Furthermore, in the current war, Israel is in a situation where it will be forced to take decisions that will not necessarily be accepted by the international community and will further damage Israel’s image in the world.
Bloomberg news agency also reported that this attack by Palestinian groups has been carried out at a time when Israel’s political situation is also sensitive. Meanwhile, the Israeli shekel has fallen to its lowest level in the last seven years.
