Israel is fighting the most expensive war in its history. In the current year alone, nearly 64,000 Israeli companies have ceased operations. It is mainly about small companies, according to the data of an analysis prepared by the consulting company Coface BDi.
Also, most new IT companies from the country prefer to register abroad. The technology sector contributes 20% of Israel's GDP. A large number of companies in this field are considering the possibility of moving to other countries.
Tourism, which is also a major pillar of the country's GDP, has lost USD 5 billion since the start of hostilities. Hotel occupancy is below 50%. For comparison, before the start of the war it was about 80%.
Agriculture and construction are also suffering heavy losses due to shortage of manpower. Previously, most of the seats were occupied by Palestinians, but now they are missing.
IMF forecasts for Israel before the start of the war were for GDP to rise by around 3.4% for the current year. However, now this percentage falls to 1-1.9%. And for 2025, the forecasts are even worse.
Even if the war ends today, the economic damage to Israel is so great that it will take a very long time to recover.
Analysts recall that Israel experienced a similar economic crisis in 1973. At that time, the country was in stagnation for a long time, as it had to allocate huge sums from its budget for defense.