The ongoing war on Gaza has reportedly caused the Israeli economy to contract 19.4 percent in the last quarter of 2023, according to the country’s Central Bureau of Statistics, almost double the market expectation.
According to the Anadolu news agency, the statistics bureau on Monday said that “the contraction of the economy in the fourth quarter of 2023 was directly affected by the outbreak of the Iron Swords War on October 7.”
Preliminary figures released by the bureau showed that gross domestic product shrank an annualized 19.4 percent in the final three months of last year.
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It said the decline was driven by a 26.9 percent drop in private consumption, as confidence plummeted amid the Gaza war and households cut back on spending, the report continues.
It adds that in the first quarter of 2023, the GDP growth rate was 3.1 percent, 2.8 percent in the second quarter and 2.7 percent in the third quarter.
For all of 2023, the Israeli economy grew 2 percent, down from 6.5 percent in 2022.
Moody’s Downgrade
On February 10, Moody’s Investors Service decided to downgrade Israel’s credit rating.
This was considered the first-ever sovereign downgrade by Moody’s, which cited the impact of Israel’s ongoing war on the Gaza Strip.
Israel was “cut by one notch to A2, the sixth-highest investment grade and on par with Poland and Chile,” Bloomberg said, also reporting that Moody’s “changed the outlook to negative, concluding a review that it started in October.”
In its statement, the global credit rating company concluded that the war and its aftermath will “materially raise political risk for Israel as well as weaken its executive and legislative institutions and its fiscal strength, for the foreseeable future”.
Moody’s expects “that Israel’s debt burden will be materially higher than projected before the conflict.”
More than 29,000 Killed
According to Gaza’s Ministry of Health, 29,092 Palestinians have been killed, and 69,028 wounded in Israel’s ongoing genocide in Gaza starting on October 7.
Moreover, at least 7,000 people are unaccounted for, presumed dead under the rubble of their homes throughout the Strip.
Palestinian and international organizations say that the majority of those killed and wounded are women and children.
The Israeli aggression has also resulted in the forceful displacement of nearly two million people from all over the Gaza Strip, with the vast majority of the displaced forced into the densely crowded southern city of Rafah near the border with Egypt – in what has become Palestine’s largest mass exodus since the 1948 Nakba.
(PC, Anadolu)
