Prime Minister Benjamin Netanyahu has attempted to downplay the economic impact, but experts warn that a ceasefire is essential to prevent further damage. The war has also severely impacted Gaza, displacing 90% of its population and leaving many unemployed. The conflict's toll includes over 40,000 deaths in Gaza, and Israel reports significant losses among Hamas fighters and terrorists.
Economic strain includes high costs for rebuilding, compensating victims, and military expenditures. Tourism, although not a major economic driver, has been especially hit hard. Shipping through Israeli ports has decreased by 16%, and major airlines have suspended flights to Israel.
Economists estimate the war could cost up to $120 billion, affecting Israel’s GDP growth, which is now forecasted to be just 1.5% in 2024. Credit rating agencies have downgraded Israel’s rating, increasing borrowing costs. The national deficit has surged to over 8% of GDP, pressing the government to consider unpopular economic measures.
Despite a drop in the unemployment rate, many small businesses have closed or are struggling. Ending the war is seen as crucial for economic recovery.