The report was published on Monday as tensions have been escalating between the Israeli regime and Hezbollah resistance movement on Lebanon’s southern border in the past days, raising the possibility of a large-scale conflict between the two sides.
The Israeli media outlet believes that a war with Hezbollah would inflict more severe economic harms on the regime than its months-long war in the southern front in Gaza.
The outlet said that a war taking place in the north means the closure of businesses and schools, which would impose heavy damage, eventually reversing economic growth.
It also predicts that a possible conflict in the north would lead to a sharp decline in value of the Israeli currency against the US dollar, while the regime would be forced into borrowing huge amounts of money to proceed with the war and subsequent reconstruction.
In addition, Kan said, multinational firms and investors would leave Israel if a war breaks out with Hezbollah.
The report comes against the backdrop of an increase in Israeli budget deficit during the 12-month period ending in April, which according to the regime’s finance ministry, reached 7% of gross domestic product.
Hezbollah and Israel have been engaged in clashes at Lebanon’s southern border ever since the Gaza war broke out in early October, with the resistance movement maintaining that it aims to help Palestinian resistance fighters. The daily exchanges of fire are now feared to spiral into full-blown war as the regime has sent thousands of reserve soldiers to Lebanon’s border.
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