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Israeli economy plunges almost 20% as Gaza war takes heavy toll

Israel's economy shrinks by nearly 20% on an annualized basis in the fourth quarter of 2023 in the wake of the ongoing bloody onslaught against Gaza, according to official figures. (Illustrative photo)

Israel's economy shrank by far more than expected in the final quarter of last year in the wake of the war on the besieged Gaza Strip, marking sharpest contraction since the pandemic.

Israel’s Central Bureau of Statistics said in a statement that economy plunged 19.4% in the final three months of 2023, as significant resources were diverted to the regime’s military engagement in the war on the coastal sliver.

That is the equivalent of a fall of 5% between October and December.

According to British daily business newspaper the Financial Times, the significant downturn in Israel’s economy was partially due to mobilizing 300,000 reservists, who abandoned their jobs and businesses for extended presence in the military.

Other factors involved the Tel Aviv regime’s funding housing for over 120,000 settlers, who left the northern and southern regions of the 1948-occupied territories close to the border with the Gaza Strip.

On February 9, Moody’s Investors Service decided to downgrade Israel’s credit rating.

It lowered Israel's credit rating from A1 to A2, underscoring the economic damage of the regime’s genocidal war on Gaza, which has resulted in thousands of human casualties and stoked geopolitical tensions around the world.

The Taub Center for Social Policy Studies, an Israeli think tank, has said the Israeli economy is expected to shrink by 2 percent this quarter, with hundreds of thousands of workers displaced by the war on Gaza or called up as reservists.

Moreover, a report published by The New York Times newspaper last December stated that about 20 percent of the Israeli work force was missing from the labor market in October, up from 3 percent before the fighting began.

Israel has been waging the war on Gaza since October 7, 2023, when the coastal sliver's resistance groups staged an operation, dubbed Operation al-Aqsa Storm, against the occupied territories.

More than 29,000 Palestinians, mostly women, children, and adolescents, have died so far as a result of the brutal military onslaught. 

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