Middle East: The Zionist entity’s economic struggles continue to escalate, even after Hezbollah temporarily ceased its military operations. This persistent downturn is largely attributed to the ongoing strikes from Yemen and Iraq, which have significantly impacted Israel’s economy and will likely have long-term repercussions.

Declining Growth and Credit Ratings

International and Israeli media, alongside economic agencies, have highlighted the worsening economic situation. Recent developments include a downgrade of Israel’s credit rating by Moody’s and a reduction in growth expectations by the Organization for Economic Cooperation and Development (OECD). The OECD now projects growth at just 0.6 percent for 2024, down from the previously estimated 1.9 ercent. The organization also forecasts continued fiscal deficits surpassing 8.3 percent of GDP through 2025, reflecting the prolonged strain on Israel’s economy due to its aggression in Gaza.

Mounting Economic Pressures

The report underscores Israel's rising inflation, persistent fiscal deficits, and structural economic imbalances exacerbated by its military actions and blockades. Notably, the fallout from Yemen’s maritime blockade and Iraq’s and Yemen’s missile operations have created economic and security pressures that are deterring investors. The Israeli shekel continues to depreciate, and government bonds face higher yields, signaling dwindling investor confidence.

Investor Exodus and Business Closures

Over half of Israel's investors have reportedly withdrawn, and around 61,000 businesses have shut down due to the ongoing war and its associated risks. A recent investor summit in Tel Aviv revealed grave concerns about Israel's economic future, with warnings that even if hostilities cease, the country faces severe challenges in regaining its investment-friendly image.

Escalating Costs of War

Reports indicate that Israel’s military spending has surged to nearly $5 billion monthly, with the total cost of the Gaza conflict expected to reach $120 billion. This includes direct military expenditures and indirect economic fallout, such as disrupted exports, halted technology investments, and significant tourism declines.

Social and Economic Fallout

Amid rising taxes and declining wages, public dissatisfaction has grown. Many settlers have opted for reverse migration, with an estimated half a million leaving since October 2023. Simultaneously, job losses and wage cuts—particularly in the private sector—continue to strain the economy.

A Bleak Economic Future

Experts agree that Israel’s aggressive actions in Gaza are exacting a heavy toll on its cities, turning them into unviable environments for investment and even basic living. As the repercussions of its policies mount, the Zionist entity faces a grim reality: its unchecked aggression in Gaza is resulting in severe blowback, threatening its economic and social stability.

These mounting challenges may foreshadow Israel’s eventual decline, as its economic foundation crumbles under the weight of its prolonged conflicts and the growing regional opposition.

Translated by Almasirah English website