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The impact of war on the Israeli economy

Economic impact of war in Israel. (Composite Image)

Israel has been pummeling Gaza with airstrikes day and night. It has bombed hospitals, schools, mosques, churches, UN facilities, water tanks, fish tanks, and even solar panels. Israel is doing everything it can to make Gaza uninhabitable.

In calling up 350,000 reservists for the occupation forces, Israel has taken those people out of the traditional labor market. Have they been replaced?

At least 126,000 settlers from areas next to Gaza and the South of Lebanon have tried to evacuate to other places and are being put up in hotels and community centers.

It's also estimated that 250,000 Israeli settlers took flight out of the settler colony to other places where they hold citizenship.

Business in the settler colony is massively impacted with 61,000 settlers currently on unpaid leave from work. There has also been a 70% drop in tourism revenue, with most flights to the Zionist entity being canceled.

The Tamar natural gas field, run by Chevron, has also been shut down and taken offline due to fear of rockets from the resistance factions. It is estimated that the closure of this field will cost the Israeli economy $200 million for every month it is closed.

In a desperate bid to avoid the risk of industrial action by the 60,000 Palestinian construction workers that the Israeli building industry is reliant on, Israel is now planning to bring in a sufficient number of workers from Southeast Asia to replace them with.

The effect on businesses has been so dramatic that the finance ministry has presented a plan to provide $1 million in grants for Israeli businesses smashed by the war.

Israel's tech industry was already struggling before the war. While it usually accounts for 48% of Israel's exports, and brought in a record $21 billion in 2021, that amount was halved in 2022.

It fell a further 68% in the first half of 2023 and the current war will further damage that key aspect of Israel's foreign policy.

All of these factors have contributed to a 14-year low for the shekel currency of the Zionist entity.

While the Israeli military elite has initiated a war of attrition to drive the Palestinians out of Gaza, the longer it goes on, the worse the economic consequences will be for the Zionist entity.

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