Gaza conflict to cut Israel's 2023 growth by 1.4%

Amid the ongoing war in Gaza, Israel's GDP growth is projected to decrease by 1.4%, settling at 2% for 2023, according to Shmuel Abramson, Chief Economist at the Israeli Ministry of Finance. This forecast reflects the economic impact of the conflict that began on October 7.

For 2024, Abramson's statement outlines various growth scenarios, considering the high uncertainty surrounding the Gaza conflict. The primary forecast, based on the war continuing into the first quarter of 2024, predicts a 1.6% growth rate. However, in a "fast recovery scenario," growth could rise to 2.2%, while a "slow recovery scenario" anticipates a minimal increase of 0.2%.

Abramson notes that the conflict has undermined financial security and consumer confidence, leading to decreased private consumption. This downturn is exacerbated by falling household incomes.

The conflict escalated following Israel's intensive air and ground assaults on the Gaza Strip, initiated in response to a cross-border attack by Hamas on October 7. According to the latest reports from the Gaza government's media office, the Palestinian death toll has reached 14,854, including 6,150 children and over 4,000 women, with more than 36,000 people injured.