Benjamin Netanyahu’s government expects the Israeli economy to grow at a slower pace this year and next because of the war in the Gaza Strip, combined with the conflict with the Lebanese group Hezbollah on the border with Lebanon.
In fact, according to the Israeli newspaper The Times of Israel, The Ministry of Finance has reduced growth from the 1.9% previously projected for 2024 to an increase of only 1.1%, while in 2025, it went from 4.6% to 4.4%.
The Bank of Israel’s forecast also predicts a poorer performance of the economy and if in April their estimates indicated an advance of 2% in 2024 and 5% in 2025, in July they were reduced to 1.5% for this year and 4.2% for the next.
Similarly, figures released by the Central Bureau of Statistics in August indicate that the Israeli economy increased at a slower rate in the second quarter of the year, below economists’ forecastssince the Israeli offensive in Gaza affects the exports and investments.
Israeli gross domestic product (GDP) grew at an annualized rate of 1.2% in the period from April to June compared to the previous three months, and decreased by 1.4% compared to the same quarter last year.
The tourism sector is dying
Tourist arrivals to the country have also dropped drastically. since the beginning of the conflict in the Palestinian enclave.
According to the Central Statistical Office (OCE) Just over 500,000 visitors arrived in Israel between January and June This year, a 76% drop compared to the previous year, when just over two million tourists visited the country.
No end in sight to the war in Gaza, These figures are not expected to increase in the coming months..
Lack of manpower
Lack of labor is another problem for the Israeli economy as there is a shortage of workers in certain sectors such as construction, agriculture and tradeOr Most of the employees were Palestinians.
Following the Hamas attacks of October 7 Israel has cancelled work permits Gazans and also the majority of Palestinians living in the occupied West Bank.
For now, the formula that the country has opted for, which needs about 92,000 workersThis is the signing of several bilateral agreements with countries such as India and Thailand to compensate for this lack of manpower.
