On October 7, the day when Palestine’s Hamas Resistance Movement launched its unprecedented Al Aqsa Storm operation in the southern Israeli-occupied territories, the shekel dropped more than 3% to reach $3.96, forcing the regime’s Central Bank to spend up to 45 billion shekels ($11.4 billion) in a bid to tackle the Israeli currency’s fluctuation. This is in accordance to Karnit Flug, a former Israeli central bank governor who spoke to Bloomberg.
Meanwhile, official figures by the Israel Central Bureau of Statistics registered a 19.4% drop in gross domestic product (GDP) during the last three months of 2023. And in early February this year, Moody’s agency downgraded Israel's credit rating from A1 to A2 while keeping its credit outlook at negative, citing material political and fiscal risks for the regime from the Gaza war.
Energy, tourism, employment and technology have all suffered due to the Gaza war as well, as the regime has halted operations at the Tamar gas field despite the fact that gas is regarded as a key sector in Israeli economy.
Reports also show that foreign flights to and from the Israeli-occupied territories have reduced sharply, including an 80% drop in flights at the Ben Gurion Airport, amid retaliatory rocket and missile attacks from Gaza. That comes as the number of tourists has decreased as well, with official figures registering a 76% decline in tourism revenues since October.
Israel’s Bank Hapoalim believes that it is premature to estimate the cost of the Gaza war. But observers and economic analysts believe that the cost is heavy and the economic repercussions are much painful than any other war in the past, and even worse than the consequences of the Covid-19 pandemic.
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