War in Gaza expected to result in a 1.4% reduction in Israel's economic growth in 2023

JERUSALEM

Israel's GDP growth could decline by 1.4%, settling at 2% in 2023 due to the ongoing war on the Gaza Strip since Oct. 7, chief economist at the Israeli Ministry of Finance, Shmuel Abramson, said in a statement.

In reference to the next year, the statement noted that “given the high uncertainty regarding the combat in the Gaza Strip, several scenarios have been prepared.”

In the basic scenario on which the forecasts are based, the Israeli economy is projected to grow 1.6% in 2024. The scenario assumes the war will persist until the first quarter of 2024.

But in the "fast recovery scenario," the overall growth next year will be 2.2%, while in the "slow recovery scenario," it will be 0.2%, it said.

“In the 'fast recovery scenario,' the overall growth for the next year will be 2.2%, whereas in the 'slow recovery scenario,' it is expected to be 0.2%,” it said.

In the 2023 forecasts, Abramson said that ''the damage to financial security and the decline in consumer morale are causing a reduction in private consumption, which is further impacted by a decrease in household income.”

Israel launched relentless air and ground attacks on the Gaza Strip following a cross-border attack by the Palestinian group, Hamas, on Oct. 7.

The Palestinian death toll from Israeli attacks on the Gaza Strip has soared to 14,854, the government’s media office in the blockaded enclave said Thursday.

The victims include 6,150 children and over 4,000 women, while more than 36,000 people have been injured, it said.

*Writing by Ziad Aslan