Yedioth Ahronoth: Israel’s economy is suffocating because of the war on Gaza
Yedioth Ahronoth newspaper stated that the Israeli economy has already begun to feel the seriousness of the situation, after it became clear that the exorbitant financial cost of the war raging in the Gaza Strip is much greater than the occupation army’s estimates, without taking into account the possibility of a comprehensive confrontation with the Lebanese Hezbollah.
The current debate regarding the losses and injuries suffered by the Israeli army during the Gaza war necessitated a re-evaluation of the scope of the war, the strength of the weapons used, and strategic considerations in rugged areas.
The Israeli army was now managing the weapons economy to ensure its readiness for any possible escalation on the northern front.
There is a stark reality emerging within the corridors of the Ministry of Defense, which is that the ongoing war has cost Israel heavy expenses amounting to $18 billion, an amount that exceeds the entire budget allocated to defense, without relying on US aid, which also amounts to $18 billion.
Israel’s urgent need for the United States, as the United States had sent Israel 230 planes and 20 ships, all loaded with the shipments it needed of military equipment and ammunition… It’s not just aid… It’s a lifeline.
According to a senior official in the defense establishment – whose identity wasn’t revealed – was attributed to saying that before the war, the Israeli army made extensive use of its ammunition reserves and succeeded in replenishing its stockpiles of them, ensuring its readiness for a possible comprehensive conflict with the Lebanese Hezbollah.
He expressed his belief that the ammunition shortage was not limited to Israel; It’s a global dilemma that the war in Ukraine contributed to exacerbating, which ignited a furious race for ammunition around the world, with the result that basic combat resources were exhausted.
This, in his opinion, prompted Israel to draw an important lesson from these developments.
In a subsequent step, many Israeli companies were forced to cancel contracts with foreign countries to supply them with ammunition and weapons, to give priority to supplying them to the Israeli army, which will affect their position and credibility in the arms market.
The Israeli Ministry of Finance said that Israel recorded a budget deficit of 17 billion shekels (about $4.5 billion) last November alone.
This comes after the Governor of the Bank of Israel expected that economic losses would reach 10% of Israel’s gross domestic product, a percentage equivalent to about $52 billion.
It’s expected that the Israeli gross domestic product will decline to 2% in 2023 from 6.5% due to the negative effects of the war, which partly caused this decline, while growth is expected to stop completely in 2024.
