Israel's economy has been hit hard in the latest round of the Israeli-Palestinian conflict, with a report by Standard & Poor's, an international credit rating agency, predicting that the Israeli economy will shrink by 5% in the fourth quarter of this year. This figure is quite staggering, and it means that the outbreak of war immediately caused significant damage to the Israeli economy. Israel's economy is not resilient enough to withstand the impact of the war, putting enormous pressure on the country. In addition, Israel's GDP growth is already very impressive, reaching 65%, so if compared to last year, this year's contraction reached 115%。Israel's GDP is about $500 billion, and at this rate, the annual loss will amount to $57.5 billion.
At the same time, Israel's fiscal deficit is facing a serious increase. Israel's fiscal deficit is expected to reach 5 percent of GDP in 2023 and 20243%, while before this round of conflict, the valuation was only 23%。This means that in the event of a war, Israel will have to pay huge financial expenditures. It is speculated that the cost of the war could be as high as $150 billion. The Israeli finance minister noted that the direct cost of the war has now reached 2$4.6 billion, and that's just the cost of throwing bombs and equipment losses. Combined with other hidden costs such as personnel** and logistical support, the cost of war can be as high as 7$3.8 billion, or $22 billion in a month. In addition, the war comes with a large number of hidden costs, such as the reconstruction of bombed-out buildings and infrastructure. In conclusion, Israel's war costs enormous and imposes a huge burden on the economy.
Some may ask, why can't Israel make its fortune through war like the United States? In fact, there are three main reasons for this.
First of all, the main purpose of the United States in fighting wars is to acquire wealth. Most of them choose to invade rich countries and plunder wealth through war. For example, the United States snatched a lot of oil resources in the Middle East war. However, unlike Gaza, there are few valuable resources to plunder. On the contrary, Israel faces costs in the war, without any revenue**.
Second, Israel is fighting its war on its own soil, and it is a small country with a population of just over 9 million, of which only about 3 million are fighting. Although Israel has mobilized more than 300,000 reservists, which is equivalent to the removal of all young and middle-aged people in the country, this is a huge loss for other industries and enterprises. Large companies and factories have had to face severe manpower shortages, causing major economic disruptions.
Third, the United States has long inextricably linked economic construction from war. Their economy has developed a pattern of servicing the war, and the cost of fighting at the front is taken up in factory production in the rear. This model of civil-military integration has led to economic development, so most of the enterprises in the United States are dual-use. However, the situation in Israel is completely different. Due to the small size of the country and the long-term threat of war, Israel did not dare to build factories on a large scale in case they were bombed and caused huge losses. As a result, Israel's economy is dominated by R&D, technology, and patent sales, and the pace of transformation is relatively slow. It can be seen that the wars fought by Israel will only cause losses to the people and money, but will not profit from them.
The economic impact of war is a complex issue, with many indirect costs and risks in addition to direct economic losses. Israel's high dependence on war has put its economy under enormous pressure. Moreover, for a long time to come, Israel may need to continue to face similar security threats, which will inevitably have a negative impact on the sustainable development of the economy.
In addition, the war has brought a lot of economic turmoil and uncertainty to Israel. For example, many buildings and infrastructure have been blown up and will need to be rebuilt on a large scale, which will further increase the financial pressure. In addition, the human and social unrest caused by the war can also have a negative impact on people's productive capacity and willingness to spend, further squeezing the potential for economic growth.
Finally, the international pressures facing Israel can also have a negative impact on its economy. For example, some countries may impose economic sanctions on Israel, restricting its imports and exports**, which will lead to fewer partners for Israel**, which in turn will hurt exports and investment.
The Palestinian-Israeli conflict has brought tremendous challenges and pressure to Israel's economy. According to international credit rating agencies**, Israel's economy will shrink by 5% in the fourth quarter of this year. In addition, the fiscal deficit is expected to reach 5 percent of GDP3%。These figures illustrate the direct and indirect costs that the war has taken to the Israeli economy. But unlike the great powers, Israel is not able to make a fortune through war like the United States for the main reasons:
1.Israel lacks plunderable resources: The United States often chooses to attack rich countries and plunder resources, such as oil, in war. But compared to the areas of Gaza, Israel lacks valuable resources to plunder. Therefore, Israel bears the costs in the war, and there is no revenue**.
2.Israel's Land and Size: Israel is fighting war on its own soil, and its territory is small and its population is small. This makes the human and economic losses suffered by Israel in the war even more severe. Large companies and factories are suffering from significant manpower shortages, which are causing huge problems to the economy.
3.The difference in the Israeli economic model: The American economy has long developed a model of service for the war, and the cost of fighting at the front is consumed in factory production in the rear. Many of the big companies in the U.S. are dual-use. However, due to Israel's small size and the long-term threat of war, Israel did not dare to build factories on a large scale in case they were blown up and caused damage. As a result, Israel's economy is dominated by R&D, technology, and patent sales, and the pace of transformation is slow.
In short, Israel's economy has suffered a severe blow in the Israeli-Palestinian conflict, which is expected to shrink by 5%. Unlike the great powers, the main reasons why Israel is unable to make a fortune through war are the lack of resources to plunder, the limited size of the country, and the difference in economic model. The war has placed enormous burdens and pressures on the Israeli economy, as well as many uncertainties and destabilizing factors.