Due to the war in Gaza… The Israeli economy is confronting challenges in 2024

Israeli economic growth was reduced to 2.5% on an annual basis in the third quarter of 2023, a figure lower than expected, during the period preceding the war in the Gaza Strip.

The recorded figures were a shock to the economy, as growth exceeding 2.8% was expected.

The Israeli economy was affected by the plan to weaken the judiciary implemented by the government and the weakness of the real estate market, and there were negative repercussions on the numbers as a result of the war.

After the war, the Israeli economy faces major challenges in terms of GDP growth; The losing war in the Gaza Strip is expected to lead to a rapid cut in interest rates with the aim of stimulating the economy and increasing financing.

This data comes after inflation declined last November by a greater percentage than expected, due to weak consumption demand.

The annual inflation rate in Israel fell to 3.3% from 3.7% in October.

Interest rates on the shekel have fallen to 4.75% currently, the highest since 2007.

The consequences of the war are expected to have a significant impact on the economy, which may force interest rates to be lowered to stimulate the economy.

The Israeli economy faces challenges in 2024, including the cost of the war in the Gaza Strip, a declining real estate market, and the collapse of the tourism industry.

The anticipated political crisis is also playing a role in impacting the economy, with parties calling for the prime minister’s dismissal.

According to recent reports, 20% of the population of Israel say that their income decreased during the war on Gaza.

Managing these challenges begins with lowering interest rates on the shekel, but this entails potential complications, such as the return of high inflation.