Economically…this is what any war against Hezbollah will do to Israel!
Debt jump
“Calcalist” indicated that the expected direct result of these matters is that the debt ratio will jump in the coming years from 60% to 66% of the gross domestic product and perhaps more, noting that economists at the “Fitch” credit agency warned last week that “ The combination of permanent military expenditures and uncertainty about macroeconomic trends could cause debt to emerge even after 2025.”
Alarming numbers
She added that as a result of the policy followed, interest rates, debts and expenditures are rising, and tax revenues are not recovering, continuing: “The numbers are worrying. Since October 7, a budget increase worth 83 billion shekels has already been approved, and it was achieved for the purpose of dealing with the war, in addition to The 2017 plan (multi-year plan) amounts to another 68 billion shekels over five years.”
Growth forecasts
Previous crises
The Israeli newspaper reported that the Israeli economy after the October War took a full decade to recover and return to its starting point. During the “difficult” years of the second Intifada, the economy fell into a state of recession and the shekel collapsed, the price of the dollar reached 5 shekels, the foreign exchange index lost about 55% of its value, and the deficit and debts rose along with unemployment.
She continued: “Many years will pass before the Israeli economy is able to return per capita growth to its level, in contrast to short rounds of fighting,” noting that the current war is very long, and the recovery period may be long.
[previous_post_link]