The Wall Street Journal quoted a leading Israeli research center predicting that the Israeli economy will contract by 2% in the last quarter of 2023, as a result of hundreds of thousands of workers being transferred due to the war on Gaza or being called up as reserve soldiers.
The newspaper quoted the Taub Center for Social Policy Studies, an independent research center in Israel, as saying that about 20% of the Israeli labor force had been absent from the market since the operation last October, up from 3% before it began.
The center said that the sharp increase in unemployment reflects the fact that about 900,000 people were called to fight, remained at home to care for children due to school closures, were evacuated from cities near the borders with Lebanon and Gaza, or were unable to work due to severe damage to their industries.
The center adds that since October, some students have returned to schools, and some Israelis have been able to work remotely, but the economic effects of such major disruption may be much greater than it appears, especially in light of the lack of a horizon for the end of the current war on the Gaza Strip. Gaza.
Expectations for the growth of the Israeli economy next year have declined significantly. While the Bank of Israel expects the economy to grow by 2%, down from 6.5%, other analysts said that the economy may not grow by more than 0.5% only.
“The huge discrepancy in expectations comes from different expectations about the length and intensity of the fighting,” said Karnit Flug, vice president for research at the Israel Democracy Institute and former governor of the Bank of Israel.
As of Sunday, 191,666 people in Israel had applied for unemployment benefits since the start of Operation “Al-Aqsa Flood” on October 7th. While the military institution summoned about 360,000 reserve soldiers, which is the largest call-up since the 1973 war.
As a result, many Israelis had to leave their lives and jobs to join the war, which greatly affected the business sector there.
