How the Hamas war wreaked havoc on Israel’s economy
Israel’s central bank said that the war with Hamas is a “major shock” to the economy and has been more expensive than initially estimated.
While Israel is no stranger to conflict and the toll it can take on national morale and the economy, the current Israel-Hamas war — triggered as a result of Hamas’ surprise attack on Israel on Oct. 7 — threatens to severely hamper the country’s finances.
After the Gaza-based militant group killed around 1,200 people and abducted more than 240 others, Israel declared war on Hamas, hammering the enclave with rockets and conducting a ground operation into the territory. Israeli retaliatory bombardment and a subsequent ground operation have left more than 13,000 Palestinians dead. Negotiations for a cease-fire and/or the release of hostages have yet to bear fruit.
Israel meanwhile has called up around 360,000 reservists — around 8% of the Israeli workforce — to assist with the military operation. The reservists tend to be people under the age of 40, in prime employment age. Along with this, around 150,000 people have been evacuated from both the north and south of Israel, most of whom cannot work. Thousands of foreign workers have also left the country. Schools across most of Israel were closed until the end of October and many are still partially functioning, meaning that parents cannot easily go to work.
“Schools are only partially functioning due to teachers being in uniform and shortage of protected spaces in case of rockets, which also has a knock-on effect on parents,” Toby Greene, visiting fellow at the Middle East Center at the London School of Economics, told Al-Monitor.
