Israeli economy ‘is a sinking ship’

News 31-08-2024

Maariv states that Finance Minister Bezalel Smotrich is contributing to the worsening state of the economy amid the war on Gaza, and aggression in the West Bank and occupied North.

Israeli Finance Minister Bezalel Smotrich does not have a clue about the economy amid his nonchalance toward the worsening economic situation in Israel in light of the 11-month multi-front war, Israeli Maariv journalist Natan Zahavi said on Saturday, citing experts.

According to Zahavi, Smotrich, who has a controversial past, is color-blind and does not see the flashing red lights warning that the ship is on the verge of crashing and sinking. He also “neglects the investors that are abandoning the sinking ship, and he does not listen to the directors of credit rating companies who downgrade Israel’s rating and warn of the seriousness of the situation and downgrade the rating again.”

Smotrich also does not realize that tourists are no longer visiting Israel, and that hotels and tourism companies lack revenue while the minister ignores their cries for help. 

“The arrogant, over-confident Smotrich is using public funds as if they were his own, distributing interest and grants to sheep from his pastures and turning a blind eye to the farmers whose fields were burned by the fires of Gaza and Hezbollah,” Zahavi added. 

He also addressed the worsening state of the healthcare system, exposing the sharp deficit in doctors, psychologists, and budgets for the rehabilitation of those impacted by the war, in addition to the immigration of doctors to work abroad and not return. 

Moreover, the cost of living and airfare prices in “Israel” are skyrocketing, with the latter being the highest in the world, in addition to “increasing reports from economics departments about high-tech technicians leaving abroad.   

Despite these realities, “Smotrich seems confident that Israel is an economic paradise when speaking during different events or interviews, and thinks he has the situation under control,” Zahavi said, adding that he suggests ministers should resign when they criticize or warn him. 

‘Israel’s’ economy is suffering and economists say the solution is to end the war

The nearly year-long onslaught on Gaza has severely harmed the Israel economy  and resulted in higher deficits, worse credit ratings, a damaged tourism sector, and continued public spending.

The financial costs of rebuilding, paying casualties, and improving defense systems have been significant. Economist Jacob Sheinin predicted a $14 billion GDP loss this year, citing that “we are losing much more.”

Despite Prime Minister Netanyahu’s claims that the damage is just temporary, the protracted aggression has had a significant impact on small enterprises, international trust, and tourism.

Leading economists believe a ceasefire is the only way to halt the harm. According to Sheinin, “If we are stubborn and continue this war, we will not recover.”

The Israeli occupation’s economy slowed the most among the 38 members of the Organization for Economic Cooperation and Development (OECD) from April to June, as “Israel’s” protracted war on Gaza continues to hinder its financial standing.

According to the OECD, “Israel experienced the most significant slowdown” as GDP plummeted from 4.1% in the first three months of the year to 0.3% in the second quarter. According to preliminary estimates, the OECD’s GDP increased by 0.5% in the second quarter of 2024, matching the rate of the previous quarter. According to the figures, the US economy grew by 0.7% in the second quarter, up from 0.4% in the first.

In May, the OECD reduced the Israeli economy’s growth prediction for this year to 1.9% from 3.3%, with a projected 4.6% in 2025. The Bank of Israel dropped its 2024 growth prediction to 1.5%, while the Finance Ministry expects 1.9% growth this year.