Israel’s GDP Plummets 20% in Q4 Amid Gaza Conflict
At A Glance
- Israel’s GDP contracts nearly 20% in Q4 2023, far exceeding analysts’ expectations.
- Significant drops in private consumption (26.9%) and fixed investment (nearly 68%) highlight the economic toll.
- The ongoing conflict with Hamas in Gaza, now in its fifth month, severely impacts the economy and workforce.
Israel’s economic landscape has faced a significant downturn, with the country’s Gross Domestic Product (GDP) shrinking by nearly 20% in the fourth quarter of 2023. This contraction exceeds the anticipated 10% reduction predicted by analysts, marking a severe economic setback. The figures highlight the profound impact of the ongoing conflict with Hamas in Gaza, which has led to human casualties and deeply affected the nation’s economic stability. A 26.9% quarter-on-quarter annualised drop in private consumption and a staggering near 68% fall in fixed investment, particularly in residential construction, underline the conflict’s toll on economic activity.
150K Palestinian Workers’ Entry Halted
The conflict’s ramifications extend beyond immediate economic indicators, affecting Israel’s workforce and key sectors. With over 150,000 Palestinian workers previously entering Israel daily, predominantly in construction and agriculture, recent restrictions have led to a significant workforce shortage. This situation is exacerbated by the mobilisation of 300,000 Israeli military reservists, impacting not only the construction and agriculture sectors but also the high-tech industry, a crucial component of Israel’s economy. The shortage of labour due to military mobilisation and restrictions on Palestinian workers has stalled many projects and disrupted economic activities across several sectors.
1.2K Lives Lost in Israel, 28K in Gaza
The ongoing war has inflicted significant human and economic tolls on both sides. The mobilisation was triggered by an attack on October 7. This attack was led by Hamas. As a result, approximately 1,200 fatalities occurred in Israel. In response, Israel launched an offensive in the Gaza Strip. Its bombing campaign has resulted in over 28,000 deaths in the territory. This conflict has escalated. It exacerbates the humanitarian crisis. Additionally, it deepens the economic rift. There are severe implications for Israel’s GDP, private consumption, and investment sectors.
Israel’s economy is facing a challenging period, marked by an unprecedented contraction in the fourth quarter of 2023. The ongoing conflict with Hamas significantly affects the human and economic landscape, with substantial drops in key economic indicators and sectors. The path to recovery remains uncertain as the nation grapples with the dual challenges of restoring peace and economic stability.
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