Fitch downgraded Israel’s credit rating due to prolonged war. However, Israel's economy remains strong and requires various adjustments to ensure stability.
GDP impairment is affected by both army reserves mobilization and restrictions on Palestinian laborers, creating supply issues.
Increased government spending is partially made up of expenses that don't support growth, Bank Hapoalim's head economic consultant Professor Leo Leiderman said.
Spending is still high, however private consumption and investment have yet to return to pre war levels, said the CBS.
GDP revealed to have decreased in final quarter of 2023 as a result of conflict, revised report shows.
The outbreak of the Israel-Hamas war in October led to a doubling of Israel's borrowing in the past year, with the state raising 160 billion shekels in debt.
2023 presented an obstacle for the Israeli economy, with the contentious judicial overhaul crisis and ongoing Israel-Hamas war sparking questions of resilience.
Expenditure on public consumption rose by 3.8% in the second quarter, while defense consumption fell by 1.5%.
IIA Chairman: “It is a period of deep economic and social crisis, but also a period that presents opportunities if we can navigate wisely.”
As Israel becomes a medium-sized country in population, GDP and growth, there are ramifications for the region and Israel’s place in the world.
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