Impact of Gaza War on Israel's Economy: Rising Costs and Business Losses

According to SAEDNEWS, Recent reports from US media highlight the severe economic repercussions of the ongoing war in Gaza on the Israeli regime. Israeli Prime Minister Benjamin Netanyahu has attempted to reassure concerned experts by claiming that the economic damage is only short-term. However, many argue that the conflict has inflicted lasting harm on thousands of small businesses and has undermined international confidence in Israel's economy.

Israeli economist Yacov Sheinin estimates that the total cost of the war could reach $120 billion, which constitutes about 20% of the nation's gross domestic product (GDP), a key indicator of economic activity. The situation has been further exacerbated by recent data from Israel’s Finance Ministry, which reports that the country’s deficit has surged to over 8% of GDP in the past year, greatly exceeding the anticipated 6.6% deficit-to-GDP ratio for 2024. In comparison, Israel's budget deficit for 2023 was around 4% of its GDP.

Port activity has also taken a hit, with Israeli ports experiencing a 16% decrease in shipping volume during the first half of this year compared to the same period in 2023.

Additionally, a report from the Israeli business information firm CofaceBDI revealed that approximately 46,000 businesses have shut down since the onset of the war, with a staggering 75% of these closures affecting small businesses. As the conflict continues, the long-term economic implications for Israel remain a significant area of concern.