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Israel’s economy losses $16bn due to Gaza war

May 10, 2024 at 4:01 pm

Israel’s attacks on Gaza and the movement of tanks, military personnel along the border continue in Gaza Strip on May 1, 2024. [Mostafa Alkharouf – Anadolu Agency]

A Bloomberg report revealed that the losses in the Israeli economy due to the ongoing war on Gaza for the past seven months amounted to approximately 60 billion shekels ($16 billion).

According to data released by the Israeli Ministry of Finance yesterday, the ongoing financial budget deficit for 12 months increased to around seven per cent of the Gross Domestic Product as of April.

The actual financial deficit is higher than the government’s estimates, which stood at 6.6 per cent for 2024. Additionally, spending increased by approximately 36 per cent in the first four months of the year compared to the same period last year.

Defence expenditures accounted for a third of Israeli spending, while revenues decreased by 2.2 per cent due to a decline in tax payments, according to Bloomberg.

The agency pointed out that Israel is heading towards its largest budget deficit this century, noting that the Israeli Central Bank previously estimated the total cost of the war at around $64.4 billion during the period 2023 and 2025.

The war caused the Israeli economy to shrink more than expected in the last quarter of 2023, with consumer spending, exports and investments being affected by the war waged by Israel in Gaza.

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