Israel's Economy Battered And Bruised By 11 Months Of War

9/5/2024 10:14:49 PM

(MENAFN- Asia Times) After 11 months of war , Israel is facing its biggest economic challenge in years. Data shows that Israel's Economy is experiencing the sharpest slowdown among the wealthiest countries of the Organisation for Economic Cooperation and Development (OECD ).

Its GDP contracted by 4.1% in the weeks after the October 7 Hamas-led attacks . And the downturn continued into 2024, falling by an additional 1.1% and 1.4% in the first two quarters.

This situation will not have been helped by a nationwide strike on September 1 that, albeit very briefly, brought the country's economy to a standstill amid widespread public anger at the government's handling of the war.

A graph showing the quarterly GDP growth for several OECD countries alongside the OECD average. Israel exhibits the most extreme fluctuation, with a sharp decline between October and December 2023. Amr Saber Algarhi & Konstantinos Lagos / OECD , CC BY-ND

Israel's economic challenges, of course, pale in comparison to the complete destruction of the economy in Gaza. But the prolonged war is still hurting Israeli finances, business investments and consumer confidence.

Israel's economy was growing fast before the start of the war, thanks largely to its technology sector . The country's annual GDP per capita rose by 6.8% in 2021 and 4.8% in 2022, much more than in most Western countries.

But things have since changed dramatically. In its July 2024 forecast, the Bank of Israel revised its growth predictions to 1.5% for 2024, down from the 2.8% it had predicted earlier in the year.

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