Was expensive. In addition to destruction, individual tragedies and deaths, a lot of money is spent to buy and raise equipment. Hence the cost of manpower as Israel – and its economy – is detecting on many fronts.
Since terrorist Islamic group Hamas attacked the Jewish kingdom on October 7, 2023, Israel is engaged in a deep fight in Gaza. After that, Israel began airstrikes in Lebanon as a vengeance of Hizbollah missiles and drone attacks across the border. Last week, Israel hit deeply with the aim of disabled its nuclear capabilities within Iran.
Israel has major problems and big budgets
All this is going on, Israel’s economy is under significant stress. Many reservoirs are said to be forced to temporarily quit their jobs. Connecting the lack of this laboratory, the work permit for many Palestinians has canceled bees and it has become rapidly difficult for them to cross the borders.
All this makes the vacancies of the job difficult. In April, the country reported 3% unemployed rate in 2021 below 4.8%.
At the same time, military expenditure in Israel has increased. In 2024, it increased by 65% to reach $ 46.5 billion (€ 40.4 billion), According to a report Published in April by Stockholm International Peace Research Institute. This brings its military expenses up to 8.8% of GDP – the second largest in the world after Ukraine.
The country’s budget of 2025 includes 756 billion Israeli Shekel ($ 215 billion; € 187 billion) – an increase of 21% compared to the previous year. This is the biggest budget in the history of Israel and according to reporting, includes $ 38.6 billion for defense. The Times of Israel,
Israel’s economy faces an uncertain future
The Iti Eater for the Professor of Economics at the Kolar School of Management, Tel Aviv University says the war is “very expensive” at this time, and “there is a great uncertainty about” near and long -term future. “
Eater told DW, “The military cost on both aggressive and defensive fronts is very high. It will definitely affect budget, deficit, GDP and Israeli Deb.”
The cost is actually high. In the last 20 months, many Israel have spent hundreds of days in reserved duty. Other people have been evacuated from their homes near the border area, causing major disruption in their lives. Social services are under stress.
Since last Friday’s attacks, many people have not worked, including manufacturing, business, technology and education systems, Eater says.
Commercial flights in and out of the country are currently suspended. Airlines have closed their jets and airspaces in the Middle East.
The Israeli government increases taxes to pay for this
To make up for some of this financial stress, the government has increased taxes. The value of the country for most goods and services, the tax (VAT) went from 17% to 18% earlier this year. The health tax deducted from employee salary and national insurance contribution increased.
Emeritus Benjamin Bental, a professor at Economics at Haifa University, says, the Israeli economy has suffered losses in the last year and a half, but “surprisingly flexible”.
While tourism, manufacturing, construction and farming have been faced, other industries such as high -tech, defense and retail food remain flexible. In 2024, the economy was brought to more than $ 540 billion, topping the previous two years.
The high -tech field indicates the continuous success of the field and the continuous success of the overall labor market that is “as tight as it has ever been.” Warning that significant energy and internet infrastructure will be targeted by Hizbollah or Iran, so far, proves to be baseless to leave the trade on the track.
High dependence of Israel on high tech
It is no coincidence that Israel is known for its advanced high -tech industry.
This sector has 12% employment of the country’s workforce and pays about 25% of all income taxes due to high salary, According to American investment bank JeffersHigh -tech services and products make 64% of the country’s exports and about 20% of the total GDP.
According to a report released in April by the Israeli Innovation Authority, the number of high -tech employees in Israel has been stutted from 2022.
In 2024, for the first time in a decade, the number of local high -tech employees decreases. At the same time, the number of employees leaving for long -term transfer to the country increased, found in the report.
Today, thesis companies still have around 390,000 employees in Israel and 440,000 forward outside the country. Some high taxes may push more tax more mobile companies or workers to leave.
Investor and long -term risk
Now the biggest unknown is the general uncertainty of the situation in and around Israel. It affects workers, employers and investors.
“Nevertheless, if you look at the stock market and the Forign EXCCtion Rate, it seems that investors are optimistic, likely there is a possibility that the fact is the fact that Iran’s nuclear threat will be abolished soon and the economy is expected to be more expected,” said the Ater.
For investors, there is an increase in short -term risk, but the real impact depends on how long the military conflict lasts and how they end.
“An alternative landscape, in which we entered a long attraction, were with Iran, likely,” said Eater. “In that case, the economy is unlikely to fruit.”
Given further, the Ater generally sees the security situation and especially the Israel-Filistini conflict as one of the country’s long-term economic challenges. In addition to the thesis stress, he says that it will be imported to keep an eye on the country’s internal social division and its implications on judicial overhaul and Democratic institutions.
Edited by: Uwe Hessler
