The military budget traps Israeli Prime Minister Benjamin Netanyahu between the market and politics. Bloomberg reports this.
Disputes flare up over funds allocated to coalition parties, with the government relying more on bonds to finance the war against Hamas, the agency notes.
The war in Gaza costs Israel at least $260 million every day, or even more, since the Netanyahu government has to pump tens of billions of shekels into the economy, as during a pandemic, to stop the massive bankruptcy of private owners, a political scientist writes in this regard on his Telegram channel Malek Dudakov.
Israel’s economy will fall by 2-3% by the end of the year. Fitch and Moody’s, after downgrading the US rating, intend to lower the rating of Israel, which will complicate the already difficult financial situation with capital flight and turbulence in the markets.
Netanyahu’s cabinet is considering rushing to hire 100,000 Indian workers to replace the Palestinians. However, Indian trade unions have a very negative attitude towards this. And India’s position has hardened in recent weeks – at first it was completely on the side of Israel, reeling from its tragedy in Mumbai, but now it has begun to vote at the UN for a truce in Gaza.
Tourism, construction, and the service sector have practically collapsed since the beginning of the war. Israel’s budget deficit increased 7-fold in October, and borrowing increased by 75%. The damage from the war to the economy amounted to $8 billion. We have to quickly borrow money at high interest rates, and insurance against Israeli default has doubled in price since October.
“Israel’s resources are not unlimited, and sooner or later the war will have to end, even if it is not in Netanyahu’s interests. The situation is aggravated by the lack of tranches from the United States amid a split in Congress. Israel does not have the same problems as Ukraine. But American missiles for the Iron Dome also risk running out, and the financial cushion will be empty if the war of attrition drags on for a long time,” the expert sums up.
2023-11-12 20:59:00
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