Bank of Israel governor cautions of economic influence amid current conflict
Date
11/28/2023 3:13:11 AM
(MENAFN) In a statement released on Monday, bank of Israel Governor Amir Yaron warned that the ongoing conflict in the Gaza Strip and escalating tensions in the northern region could impose a significant economic toll on the country, amounting to approximately 10 percent of Israel's gross domestic product (GDP). These remarks were made following a meeting of the Bank of Israel’s Monetary Policy Committee, during which the decision to maintain interest rates at 4.75 percent was announced.
Governor Yaron specified that the anticipated economic impact encompasses both direct expenses related to military operations and the subsequent reconstruction efforts. The estimate aligns with projections put forth earlier in the month by the Israeli National Economic Council, a governmental body, which suggested that the financial implications of the conflict could reach 200 billion shekels, equivalent to $54 billion. This figure, constituting 10 percent of Israel's GDP, roughly corresponds to $50 billion based on the country's GDP statistics for the year 2022, which stood at approximately $500 billion.
The cautionary statements by Governor Yaron underscore the multifaceted economic consequences associated with the ongoing conflict, encompassing not only immediate military expenditures but also the long-term financial commitments linked to the reconstruction endeavors in the aftermath of the hostilities.
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