Israel’s Economy Convulsed by the War With Hamas

    Israel's economy is being "tested to the limits" as the war with the Hamas continues to wage on. Israel mobilized a record 350,000 reservists trying to push the offense on Gaza, which drained roughly 8% of their workforce. Additionally , more than 120,000 Israelis have had to leave their homes due to the war.

The limited workforce, combined with shutdowns of offices, has triggered a crash in activity in Israel spanning from agriculture to banking. This crash is being compared to the impact of Covid-19 pandemic and the lockdowns that brewed from that.

Further estimates from the impact of the war include:

- A staggering $2.5 billion is being lost by the government per Mizrahi-Tefahot, a top Israeli lender.

- Private consumption fell by nearly a third in the days after the war broke out.

- Nearly half of the 500 high tech companies surveyed last week reported a cancellation or delay of an investment agreement.

The war has proven to be a large test on Israel, as well as their foreign relations such as Qatar. The oil rich nation has spent decades as the Middle East's go between, and are constantly criticized by neighboring countries for housing Hamas leaders while maintaining connections to Israel.

The longer the war goes on, the more damage this will cause not only to the fighters but also economies as a whole. For Israel, these devastating losses will become much worse if the war starts to enter a stage 3, or become global.

Article link: https://www.bloomberg.com/news/newsletters/2023-10-30/israel-hamas-war-s-economic-shock-turkey-rates-egypt-pound-egp-black-market#xj4y7vzkg