The Israeli Hapoalim Bank estimated the initial losses the Israeli economy suffered since the onset of Operation Al-Aqsa Flood and their brutal aggression on the Gaza Strip to be around $6.8 billion.
The bank’s chief strategist, Modi Shafrir, said that “as of the present time, it is tough to know how the war will develop—whether it will trigger a ground campaign to conquer parts of Gaza that will take many weeks, or whether a campaign will also be launched in the north, and how long the reservists will be called up for duty.”
“At present, it can be assumed (in a very rough estimate) that the costs of the current war will amount to at least 1.5% of GDP, which means an increase in the budget deficit of at least 1.5% of GDP in the coming year,” he further added.
War with Hamas Will Cost Israel ~NIS 27B, Bank Hapoalim Projects
The cost of the war between Israel and the Hamas is estimated to be at least NIS 27 billion ($6.8 billion) as of now, according to initial projections by Bank Hapoalim.
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Shekel Drops Significantly
Israeli reports reveal that “the shekel had already weakened by 10% so far in 2023 to a rate of 3.86 per US dollar on political turmoil, and on the heels of what is expected to be a long war with Hamas in Gaza, the shekel was set to depreciate sharply.”
Following the escalations, the shekel plunged 2.8% against the US dollar to 3.95, its lowest level since February 2016, matching its largest one-day drop since March 2020.
Selling Assets to Maintain Stability
Earlier on Monday, October 9, 2023, the Bank of ‘Israel’ announced that “it would sell up to $30 billion in foreign currency in the open market, the central bank’s first-ever sale of foreign cash, to preserve stability amid the Gaza war with Palestinians.”
“We are in an unprecedented security situation, and we estimated that the market could get into a situation of divergence without the announcement of our intervention,” Golan Benita, head of the Bank of Israel’s markets department, told a news conference.
No Longer the Ideal Investment Zone
In a statement to the Al-Manar website, Lebanese economist Dr. Mahmoud Jebai confirmed that “war is not only measured by the battlefield but also includes the economic side. It is common that Illicit settlers and foreign companies have joined the Israeli entity to benefit and live lavishly in peace while also pursuing financial and economic rewards.”
“The losses in the Israeli economy are estimated at $6.8 billion within only 4 days. This is in addition to the shekel’s loss of about 15 to 20% of its value,” Dr. Jebai added.
He further explained that “as a result of the possibility of a full-scale battle with the Axis of Resistance, global corporations began to consider leaving the Israeli entity. This reality plays an essential role in putting pressure on the enemy. Also, the lengthy duration of the warfare will greatly increase enemy losses at immense economic cost.
Dr. Jabaei stressed that “the steadfastness of the Palestinian resistance and the ability to fire rockets and bomb sensitive places in the entity paralyzed commercial, tourism, and economic activity, as the loss reached 15% in the banks and the stock market has lost about 10% so far.”
He wrapped up by emphasizing that the economic aspect is critical to turning the tide in favor of the Palestinian resistance.
Source: Al-Manar English Website