Israel’s economy is grappling with severe challenges nearly 11 months into its ongoing war with Hamas. The conflict has led to widespread economic disruptions, including closed businesses, empty hotels, and reduced airline activity. Despite Prime Minister Benjamin Netanyahu’s assurances of temporary damage, experts warn that the war’s prolonged nature is straining Israel’s economic stability.
The war has taken a significant toll on Gaza, causing mass displacement and severe economic hardship. Within Israel, the conflict has led to a sharp decline in tourism and increased military spending, with a predicted total cost of up to $120 billion. Economic growth forecasts have been downgraded, and international credit ratings have been lowered, adding to fiscal pressures.
Small businesses have been especially hard hit, with many closing due to reduced activity and reserve military duties. The Finance Ministry has reported an increasing budget deficit, exacerbated by the ongoing conflict. Economists suggest that a cease-fire could be essential for economic recovery, as continued warfare may prevent a return to economic stability.
