The “Al-Aqsa Flood” was not just a passing process, but it had repercussions at the regional and international levels, especially with regard to economic aspects. There are fears of the negative effects of the continuation of the Israeli war of annihilation on Gaza and the expansion of its scope, mainly affecting the economies of the region, and thus the economy of the world. .
The most important manifestations of the Israeli war on Gaza encroaching on the perimeter of the occupied Palestinian territories were the presence of negative economic impacts on neighboring countries, as well as global shipping traffic in the Red Sea, through which 12% of international trade and approximately 20% of global oil trade passes.
Economy of Israel
The Al-Aqsa flood had direct negative economic effects on Israel from day one. The value of the Israeli currency declined, and the stock market also declined significantly due to the flight of many foreign investors.
It is estimated that the value of the Israeli currency has declined by 5% despite the Israeli Central Bank pumping nearly $30 billion to maintain the value of the shekel, and this has affected Israel’s balance of foreign exchange reserves.
As for the losses of the stock market in Israel due to the Al-Aqsa Flood operation, they were estimated at rates ranging between 9% and 20% over different periods, and the banking sector was the most affected in the stock market due to the exit of foreign investors, and a study by the Arab Institute for Studies estimated the losses of the Israeli stock market due to the war on Gaza at about 20 billion. dollar.
In the latest results regarding the negative effects of the war on the Israeli economy, Israel’s credit rating was reduced by the relevant agencies, the most recent of which was Standard & Poor’s, which lowered Israel’s rating from “A+” to “A” for the second time during the year, and maintained its outlook. Negative futures, given the geopolitical and security risks surrounding Israel.
The agency’s report indicated expectations regarding a decline in Israel’s economic growth performance rates, the presence of a financial deficit in the short and medium terms, and an increase in Israel’s war spending.
As for the economic costs of the war on Israel, Bloomberg indicated that Israeli officials estimated the war bill during the past year at about 66 billion dollars, which is equivalent to 12% of Israel’s domestic product. Military spending during the past year amounted to 25.9 billion dollars and the budget deficit was 8.3 billion dollars. %, which led to an increased reliance on loans to finance this deficit. Israel’s loans during the past year amounted to approximately 53 billion dollars.
Global economy
At the global level, reports noted that the United States provided significant support to Israel through approximately $6.5 billion in security aid, in addition to facilitating the granting of more aid, which one report stated was approximately $23 billion in 2024, and it was reported that the amount included Humanitarian aid to Gaza.
American support for Israel was not limited to providing weapons and various other material and economic aid, but rather extended to direct military support by moving huge naval military vehicles to the vicinity of the region.
At the level of the global economy, what worries some about the expansion of the Israeli war on Gaza is not only the lives lost due to the Israeli genocide of the Palestinian people and the management of infrastructure and homes, but emphasis is placed on the importance of the region continuing to pump oil and gas to the international market, as the region supplies the world with approximately 25% of its oil needs and approximately 14% of its gas needs.
Because of what the Yemeni Houthi group imposes on international trade movement through the Red Sea and the prevention of Israeli ships from passing through the Bab al-Mandab Strait, there are estimates that 70% of global trade that passes through this strait has changed its course away from this region, which has led to a rise in Shipping costs, thus increasing commodity prices and contributing to the continuation of the global inflation wave.
Given that the region is distinguished by supplying the world with about 25% of its oil and gas needs, the risks of the region entering into a comprehensive war due to Israeli practices may threaten the oil and gas sectors and ignite prices again, especially since there are possibilities that Iraq and Iran will enter the circle of war, as they are two important countries. In the oil market.
Regarding Israel’s exports of natural gas, the gateway to these exports to the world is Egypt, which estimates showed a recent decline in its imports of Israeli gas by 26%.
Technology sector
With the recent developments in Israel’s practices in the context of the genocidal war it is waging against Gaza, it has bombed some communications means in Lebanon. This step will have very negative repercussions on the technology sector globally. The main concern is no longer that modern communications means are carrying out espionage and data transfer operations, but the fears will be There is a greater emphasis on employing these devices in bombing operations, and the matter will not be limited to means of communication, but may extend to everything related to modern technologies that can be controlled remotely.
Israel wanted to wash away its technological failure after the Palestinian resistance succeeded in the Al-Aqsa flood in disrupting its information systems for the security of the colonies around Gaza, which shook the reputation of Israel, which it was proud of in the technology market and had tangible exports, especially in spy and surveillance devices.
The process of bombing communications facilities in Lebanon put the entire world before new spending challenges related to the degree of reliability, first and foremost, in importing technology, as well as setting new or larger budgets for the security of information systems.
Companies that dealt with Israel in the field of communications or technology in general will be subject to suspicion and fear from other countries.
IMF estimates
By following up on the reports of International Monetary Fund experts visiting Egypt, Lebanon, and Jordan, we find that these reports focus on the high state of uncertainty regarding the economic performance of the region as a whole and of the Israeli neighboring countries, especially due to the Israeli war on Gaza and the subsequent tensions in the Red Sea region that affected trade. International negatively.
Lebanon affected:
- It was estimated that the economy was already experiencing a significant deterioration.
- The war on Gaza contributed to the decline of the tourism sector.
- The Israeli aggression expanded to southern Lebanon, and the clash with Hezbollah led to a large internal displacement estimated at about one million people.
- The Israeli aggression against Lebanon caused damage to infrastructure, agriculture and trade in the regions of southern Lebanon.
- About 10 airlines had suspended their flights to and from Lebanon, and most international companies recently canceled their flights to and from Beirut.
- Lebanese data showed that tourism traffic in the first half of 2024 declined to about 1.5 million tourists, compared to 1.6 million in the corresponding period last year.
Jordan was affected
- The assessment of monetary experts did not differ much with regard to Jordan regarding concerns about the negative impact on its economy due to tensions related to international trade in the Red Sea, as well as on the trade and tourism sectors, but the Fund experts believe that the Jordanian economy is still able to deal with these shocks well provided that they do not The war is escalating regionally.
- According to a report by the Central Bank of Jordan, the tourism sector in the first half of 2024 witnessed a decline in the number of tourists by up to 7.9% compared to the corresponding period last year, as the number of tourists reached 2.3 million compared to 2.5 million in the first half of 2023.
- Former Jordanian Prime Minister Hani Al-Khasawneh had stated that the rise in shipping costs for international maritime trade led to higher inflation rates in Jordan.
Egypt affected
- Regarding Egypt, IMF experts alerted to the difficulties facing the Egyptian economy before the Al-Aqsa flood, but the Israeli war on Gaza and the subsequent trade tensions in the Red Sea have significantly affected the tourism and Suez Canal sectors.
- Recently, Egyptian President Abdel Fattah El-Sisi stated that Egypt’s losses in the Suez Canal due to current events in the region are estimated at about $6 billion.
- Tourism sector revenue data showed a positive performance, reaching $10.86 billion from July 2023 to March 2024, compared to $10.31 billion in the corresponding period from July 2022 to March 2023.
Syria affected
As for Syria, although the reports of the IMF experts did not address it, it is noted that it has received many strikes inside its territory from Israel without any response, which means losses related to infrastructure and the continuation of the economic crisis in Syria, which began several years ago.
