The Ongoing War
Israel is currently facing a big economic crisis because of the war happening in the Gaza Strip. The Central Bank of Israel is really worried about this and wants to take immediate steps to limit the decline in the country's GDP. They are focusing on four main sectors: technology, agriculture, construction, and tourism.
The Impact on Technology
The technology sector in Israel is a big deal. In fact, it makes up 18.1% of the country's GDP in 2022. But because of the war, things have been tough. Production has doubled, reaching 290 billion shekels in 2022. However, there's a problem – there aren't enough workers, and investments in technology have decreased by 50% compared to last year. This is a big blow to the economy.
The Struggle in Agriculture
Another sector that's been hit hard is agriculture. The war has caused the evacuation of towns near Gaza and those near Lebanon. This means that a lot of land used for growing vegetables is now empty. In fact, the Gaza Strip alone makes up 30% of the land allocated for growing vegetables in Israel. So, there's a shortage of crops and food products in the markets, which is not good for the economy.
The Collapse of the Construction Sector
The construction sector is also in trouble. Before the war, there were over 100,000 Palestinian workers in this industry. But now, they can't enter Israel, so there's a shortage of 100,000 workers. This has led to the closure of 50% of construction sites. Additionally, many foreign construction workers from countries like Moldova and China have left Israel because of the war. This has caused a loss of about two billion and 400 thousand shekels per week ($644 million) in the construction sector. It's a big blow to the economy.
Tourism Sector Affected
Now, let's talk about the tourism sector. Unfortunately, the war has caused significant losses in various regions and tourism sectors. In 2023, there was some growth, but now it's expected to setback. The Al-Aqsa Flood operation and Israeli aggression on the Gaza Strip are big reasons for this setback. It's not good news for the economy.
Facing the Costs
Dealing with the costs of war is not easy. The Israeli government has set aside 10% of the country's GDP to finance the war for two months in the 2024 budget. But there's some good news too – the United States is supporting Israel by providing $3.8 billion worth of weapons and ammunition. This support is seen as a major factor in avoiding a disastrous future for Israel's economy.
Israel is going through a tough economic crisis because of the ongoing war in the Gaza Strip. The technology, agriculture, construction, and tourism sectors have all been affected.
