Urgent.. Israel loses a billion dollars every night

The conflict in the Palestinian Gaza Strip and tensions with Iran have caused serious damage to the Israeli economy, prompting major institutions to lower the credit rating of the Zionist state in occupied Palestine by one notch.

According to The Times of Israel, Standard & Poor’s downgraded Israel’s credit rating from "AA-/A-1+" to "A+/A-1" Due to the slowdown in the Zionist entity’s economy and the increase in geopolitical risks, it is the latest downgrade since Moody’s lowered the rating in February.

The conflict in Gaza, along with escalating tensions between Tel Aviv and Tehran, has caused Serious damage to the Israeli economy since October 2023.

In the fourth quarter of 2023, there was a decline of 20.7%, far exceeding the initial forecast of 10%.

The national debt rose by $43 billion last year, including $22 billion accumulated since the start of hostilities. The Israeli currency, the shekel, lost more than 4% of its value against the US dollar in 2024.

Professor Avi Weiss, head of the Taub Center for Social Policy Research in Israel and professor of economics at Bar-Ilan University, says: "It has shown The Israeli economy is remarkably resilient, and after overcoming the initial shock, the labor market is gradually returning to normal.

Even the construction industry has returned to work, “which indicates that Israeli Arabs are back at work.”

The number of men in reserve service is also gradually decreasing, and currently, outside the workforce, the number is still high, but only half of the number registered in the first phase.

Weiss expects the Israeli economy to grow by 1.5-2% in 2024 and more than 5% in 2025. This is well below normal levels, 3.5% by 2024, but still at the target level over two years. In addition, the per capita rate will remain fairly stable in 2024.

Achieving this depends a lot on whether the military situation is stable or not, Avi Weiss said. Including tensions between Israel and Iran.

Dr. Stephen Turner, director of Turner Consulting, a leading geopolitical business and consulting firm based in New York, has the opposite view. Saying that “the Israeli economy is not resilient, and it suffered a lot from the war,” stressing that “the Israeli economy collapsed in half when the conflict began in Gaza because almost the entire Zionist entity was mobilized for the war effort.” Hundreds of thousands of Israelis were evacuated last October, and many remain so to this day. These people cannot work or pay bills, including mortgages and rent on the homes they vacated in northern and southern cities six months ago.

Dr. Turner added: “Although Although tourism, a major source of income, has also been damaged by the conflict in Gaza, it will eventually recover, but it will not begin to recover until the war ends.

He noted that foreign investment in Israel also decreased in 2023. Indeed, in the first quarter of 2023, foreign direct investment in Israel decreased by 60% due to political and societal instability caused by the judicial reform of the Israeli government.

The conflict in Gaza only exacerbated concerns about Israel’s future development.

Overall, foreign direct investment declined by 28.7% in 2023 compared to 2022, according to the Central Bureau of Statistics.

Turner expects that “given the security risks of war, and the lack of international support for aggression “The Israeli crisis over Gaza, and the ongoing strikes and protests in Israel over a variety of issues”, political issues will not flow over them for a while. “

Standard & Poor’s expects the deficit to rise Israel’s general government debt will reach 8% of GDP by 2024, with net government debt peaking at 66% of GDP in 2026.

The credit rating institution also expects the Israeli conflict to continue In Gaza until the end of 2024.

Standard & Poor’s said that it will review the economic situation of countries and its ratings again on May 10, indicating that they may decline further if they expand Tel Aviv’s ongoing conflict.

How does military escalation lead to adverse results for the Israeli economy?

It is worth It is noteworthy that Standard & Poor’s decision to lower Israel’s rating by one level came before the clear attack launched by the Zionist entity on Friday against Iran.

And after launching a counterattack on April 13 of this year. In retaliation for the killing of two senior Iranian generals in Damascus, Tehran warned that even the smallest Israeli attack would face strong retaliation.

An Iranian base near the city of Isfahan was attacked by drones yesterday, Friday.

According to government sources from the European Union and the United States, Israel carried out the attack. In response, Tehran said that the drones had been successfully destroyed, and indicated that it would not retaliate “immediately.”

However, with the risk of long-term escalation, The future of the Israeli economy seems to hang in the balance.

According to Benjamin Bentall, professor emeritus of economics at the University of Haifa, the continuation of mutual attacks between Iran and Israel will be disastrous for the Israeli economy.

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“If you think about every few months, or every month, or every week or whatever – a missile attack from Iran, which requires about a billion dollars to defend overnight, that of course is not sustainable,” Bentall said. , stressing that this is a possible scenario.

The ongoing confrontation between Israel, Hamas, Hezbollah, and the Houthis also threatens to exhaust the economy of the Zionist entity state in occupied Palestine.

Weiss suggested that “the optimistic scenario includes the return of Israeli prisoners, a civilian government in the Gaza Strip that replaces Hamas, a political agreement with Hezbollah, a balance of deterrence with Iran, and a political agreement.”

If this happens, Israel will be able to gradually reduce military spending and restore its position in international capital markets, and this means returning to the path that was suddenly disrupted since October 7, 2023.

The professor warned that “any deviation from this scenario will have its costs, and in particular, the ongoing tensions along the northern border will prevent recovery in that region and maintain geopolitical instability.” This means higher security costs and, as a result, a lower economy. And declining growth."

Ending the conflict leads to the demise of the occupation

According to Rodney Shakespeare, visiting professor of dual economics at Trisakti University in Jakarta, Indonesia: " The conflict will not end until there is a two-state solution and the state of the usurping Zionist entity recognizes a Palestinian state with Jerusalem as its capital. Currently, Israel is merely an unstable entity, and its existence depends on conflicts with others, and “ Most of the world now knows this.

For his part, Turner believes that political reform in Israel that would bring more moderate forces to power could be a viable solution. The ongoing crisis regarding the establishment of a Palestinian state with Jerusalem as its capital.

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