Israel’s economy is experiencing significant disruptions due to the ongoing conflict with Hamas.
Workers frequently rush to shelters in a security door manufacturing plant in southern Israel.
They do this in response to Palestinian rocket warnings. This situation, affecting the Rav-Bariach group, reflects broader economic impacts.
The plant in Ashkelon is close to the Gaza Strip border. Its operations symbolize the challenges facing Israel’s economy since the war began on October 7.
Idan Zu-Aretz, the company’s CEO, describes this as their current reality. Many workers are either in the military or have moved for safety.
As a result, the plant runs with a reduced workforce.
Ravid Brosh, in charge of international development, reports more frequent air raid sirens since the war’s start.
Despite Israel’s defense systems, a rocket hit the factory on October 10. This attack exemplifies the wider risks to Israeli businesses.
The initial Hamas attack in Israel resulted in about 1,200 deaths. This led to new economic challenges for Israel.
The country called up about 360,000 reservists for the Gaza offensive. Hamas states over 12,300 people, mostly civilians, died in the Israeli attacks.
In Israel, the conflict caused at least 125,000 people to leave their homes.
These displacements occurred in both southern Israel and near the Lebanon border. This was due to fighting between Israeli forces and Hezbollah, Hamas’s ally.
Severity of Conflict
Benjamin Bental from the Taub Center notes the severity of this conflict. He compares it to previous crises, finding it more significant.
He highlights that industries like construction are especially affected. This is due to suspended work permits for Palestinian laborers.
The hospitality and restaurant sectors are also struggling. There’s a noticeable drop in consumer confidence.
This is evident in a 10% decrease in credit card transactions. The decline reached 20% following the ground offensive in Gaza.
Predictions for Israel’s economic growth are mixed. Some expect a downturn, but the Bank of Israel predicts 2.8% growth in 2024.
The technology sector, a major part of the economy, is key to this resilience. A survey showed that 70% of tech companies had project cancellations since the war began.
If the conflict extends to northern Israel, the impact could worsen dramatically. Bental warns of a potentially ‘terrible’ situation.
Prime Minister Benjamin Netanyahu prepares for a prolonged, challenging conflict. This will likely mean increased public spending.
Economists have expressed concern to Netanyahu about underestimating the crisis’s impact.
With information from AFP
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