Israel – An Israeli economist estimated that the war on Gaza has already cost the Israeli economy more than $67.3 billion.
“So far, the war has already cost the Israeli economy more than NIS 250 billion, and the defense establishment wants an annual increase of at least NIS 20 billion,” Rakefet Russak-Aminach, former CEO of Bank Leumi, told Israel’s Channel 12.
“The deficit is much bigger, we have evacuees, wounded people and a lot of economic needs that are not even counted in the cost of the war,” she added.
In this regard, Professor Yaakov Frenkel, winner of the Israel Prize for Economics and former governor of the Bank of Israel, said: “The most urgent and important task is to deal with the deficit.”
He added: “The year 2023 began without a deficit and since then the situation has deteriorated. At the end of July, the deficit was 8.1 percent, about 155 billion shekels. It must be covered.”
“The good news is that there has been no change in the unemployment figures even during the war,” Israel’s Channel 12 says. “According to the latest official update, the unemployment rate is 3.2 percent, which is an unusually low rate by any standard.”
“The credit data is also encouraging, showing that Israelis are spending more on their credit cards today than they did at the same time last year, and although there was a dip at the start of the war, there has been a recovery since then,” she added.
She added: “But international markets are starting to lose patience with Israel. Credit ratings have been downgraded and risk premiums have increased. The increase since the war began is clear to see.”
“In the high-tech space, we are seeing signs of a decline in foreign investment,” said Gil Schwed, CEO and co-founder of Check Point. “Naturally, foreign investors are afraid to invest in a country that is not in a stable state.”
“If I’m an American investor, I look for a stable, familiar environment, and Israel is, of course, far away and less familiar. Over many years, we’ve built that trust that we can be trusted and that we’re a stable place. Things can’t go wrong,” he added.
Frankel said: “The Israeli government has lost credibility with investors.”
“Credibility is not bought through speeches, but through actions,” he added.
In turn, Uri Levin, former CEO of Discount Bank, warned that “if we do not deal with the crisis, we will reach a very serious crisis and perhaps we will reach a dangerous spiral. There is such a real danger, and in the economy you are not allowed to play.”
“The first thing that needs to happen is to restore confidence. The government needs to restore the confidence of international investors. Confidence has fallen, and we see it in the opening of spreads, in international discourse and in ratings companies,” he added.
“Without the confidence of international investors, we will not be able to rehabilitate the economy. The foundation of the economy is confidence,” Levin continued.
Anatolia
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2024-08-18 13:26:52
