Israeli economy shrinks by nearly 20 percent due to its war on Gaza

Israel's GDP has shrunk by almost one-fifth in the final quarter of 2023, compared to the three months prior, according to official figures.

Overall, Israel's GDP grew by 2.0 percent in 2023, short of the 2.3 percent projection made by the Bank of Israel after the war's outbreak in October, the Central Bureau of Statistics figures showed on Monday.

However, the 19.4-percent fall in the final quarter was attributed to the scale of the ongoing Gaza war's effect on the nation's economy.

It was the single worst quarter for the Israeli economy in terms of GDP per capita since the opening quarter of the Covid pandemic in early 2020.

Exports fell by 18.3 percent and imports by 42.4 percent, fuelled in part by airlines terminating flights and international shipping avoiding the Red Sea after Houthis began attacking ships over Israel's brutal attacks in Gaza.

The country has also seen massive labour shortages and the collapse of the tourism industry since the outbreak of war.

Palestinian labourers barred

Israel has launched a deadly offensive on Gaza following a Hamas attack that Tel Aviv says killed nearly 1,200 people.

The ensuing Israeli attacks have killed nearly 29,092 Palestinians and injured about 69,028 with mass destruction and shortages of necessities.

The Israeli war on Gaza has pushed 85 percent of the territory's population into internal displacement amid acute shortages of food, clean water and medicine, while 60 percent of the enclave's infrastructure has been damaged or destroyed, according to the UN.

The Israeli military called up over 300,000 reservists in days following October 7, and the government immediately barred the entry of at least 160,000 Palestinian labourers who made up a considerable portion of the construction and agriculture workforce.