The Hebrew Economic Economic website drew in a lengthy analysis of one of the darker scenarios of the Israeli economy, warning that the continuation of the open military confrontation with IranAnd accompanying it with an internal political and security project to occupy Gaza StripIt may push the Hebrew state to a critical financial and economic collapse point that it has not known since its foundation.
A war of attrition may crush the economy
The report states at its beginning that the Iranian threat has been present in the equations of Israeli economy and policy for 46 years, but in recent decades it has turned into the most prominent geopolitical factor that determines the size of the dangers facing the Israeli economy, and is reflected directly on what is known as “the risk allowance” that is used to determine the cost of borrowing andIsrael credit classification In global markets.
While in the official discourse, the “optimism” scenario is presented to the possibility of eliminating the Iranian threat, warning like Calist that the likely real scenario is the war that extends along the lines of the Iran -Iraq war, which means – according to the report – the continued bleeding of resources, the escalation of defense spending, and the erosion of international confidence in the Israeli economy.
Credit classification is in danger
The report confirms that the Israeli government has already exhausted all its financial reserves, and that Disability The advertiser (4.9%) does not reflect the full truth, because the current war with Iran was not originally included in the state budget. Rather, the declared deficit is described as a “financial illusion”, given the explosive security reality and the absence of a clear financial plan to cover the expenses of the war.
Economic analyst Adrien Philot, the author of the report, warns that the continuation of military operations necessarily means increasing the financial deficit and expanding public debt, which may lead to an additional reduction in the credit rating of Israel, and will make borrowing from international markets a complex and high -cost task.
Security expenditures swallow the budget
The report indicates that the existing war drains public spending, and that the security budget cannot be reduced under the project of controlling Gaza, and then the government will be imposed harsh austerity decisions in the fields of education, health and social services.
“Even in the natural circumstances, Israel was spent on civil services with 3 to 4 degrees Celsius than the average state Economic Cooperation OrganizationAnd if an additional reduction in spending is imposed, we will be in front of a gradual social collapse.
International isolation and a repellent environment
It is noteworthy that the political isolation of Israel has been escalating since October 7, 2023, and that any additional escalation in Gaza will deepen this isolation and make it Israel An inaccurate market for international investors, especially since the world views the current Israeli government as an extremist right -wing government that lacks international legitimacy and exposes the region to a permanent explosion.
Economic growth is under danger
In light of these data, the report believes that the growth of the Israeli GDP will remain weak and unstable, and that any temporary improvement in tax revenues, as happened at the beginning of this year, is not used in the long run, but may be just an instant impact of an exceptional activity, which will not stand up to the expected wave of retreat.
The report confirms that the government may find itself forced to raise taxes very soon, and this foreshadows a double pressure on the private sector and consumers, at a time when confidence erodes and increases the cost of living due to the continuous state of emergency.
Mysterious fate
The articles of the report in the report is a direct warning that the insistence of a government Benjamin Netanyahu–Smotrich Assuming a long military occupation of the Gaza Strip will make any hopes to improve economic indicators, just “distant dreams”. The costs of the occupation – according to the report – are essentially huge and continuous security expenses, will not allow the budget to be reduced, and will not allow the debt to decline, and will not contribute to stabilizing interest rates or investment rates.
Calcalast concludes his analysis with a strongly worded message: “If the government continues to implement visions Etamar bin Ghafir And with Smotrich Regarding Gaza, the financial collapse is not just a possibility … but rather an actual path that began to be formed in front of our eyes through financial channels.