Reuters said on February 19 that Israelis slashed spending, travel and investment at the end of 2023 as Israel's all-out war against Palestinian Hamas militants in Gaza hit the economy hard, according to data released on Monday.
The war has halted economic growth, not least as a result of the incessant rocket attacks by Hamas and Allah, the conscription of large numbers of reservists, and the displacement of hundreds of thousands** from border towns near Gaza and Lebanon.
The $500 billion economy shrank quarter-on-quarter in the fourth quarter of last year, or an annualized rate, the Israeli** Statistics Office said in a preliminary estimate of gross domestic product (GDP).4%。
Despite this, the country's economy has achieved positive growth throughout 2023.
* "The economic contraction in the fourth quarter of 2023 was directly affected by the 'Iron Sword War' that broke out on October 7," the statistics bureau said. ”
Israel's economy grew by 2 percent for the whole of 20230%, compared to 6 in 20225%。But the country's growth rate last year was higher than that of OECD member countries17% average. However, Israel's per capita GDP fell by 01%, compared to an average GDP growth rate of 12%。
Before Hamas launched a cross-border attack on southern Israel on October 7 last year, the Israeli economy is on track to achieve about 35% growth. October was a particularly difficult month for most Israelis. Many have relatives and friends killed or abducted in the attack. They are not in the mood to shop, and movie theaters and other forms of entertainment are largely closed, even though they are now open.
Depending on the duration of the conflict and whether it expands to other fronts, Israel's economy is expected to grow by 2% in 2024. The country's central bank and other institutions expect the economy to be sharply** in 2025 due to good fundamentals, led by the high-tech sector, and the resilience of the economy after the outbreak of previous conflicts.
Previously released data showed that inflation in Israel fell to a low of 2 in more than two years in January6%。With the economy slowing and inflation returning to the 1%-3% target range, this is usually enough to prompt Israel to cut interest rates again after cutting rates by 25 basis points in January. But some analysts believe that policymakers intend to remain cautious and stick to the main objective of maintaining financial stability for now.
The Bank of Israel's next interest rate meeting is on February 26.
The country's economy was affected by the following factors in the fourth quarter of last year: private spending, the main driver of economic growth, fell by 269%, exports fell 183%, and investment in fixed assets (especially residential buildings) fell by 678%。
* Expenditures, mainly for war expenses and compensation for affected businesses and households, increased by 881%。
The Bank of Israel expects economic growth to be 5% in 2025.
For the whole of 2023, private spending fell by 07%, exports fell 11%, fixed asset investment fell by 19 percent, while spending increased by 8 percent3%。
After the release of the above data, the country's currency, the shekel, was exchanged against the US dollar**06%, Tel Aviv's main stock index, the TA125 index**06%。(Compiled by Zhang Lin).