Business News

Business leaders urge government to support war-hit economy

War compensation package approved but not implemented

The Israeli government has approved a war compensation package to help businesses and employees affected by the ongoing war with Hamas in the Gaza Strip, but the plan has not yet been implemented, according to a forum of 200 leading businesses. The forum, which consists of the heads of about 200 of Israel’s largest companies, called on Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich to put an economic wartime aid plan into place with immediate effect, and to refrain from using coalition discretionary funding for any purpose other than for the war effort and relief for war-affected businesses.

The forum said that although the war has been going on for a month, a substantial economic plan has not yet been launched to support the economy in general, and affected businesses and households in particular. “Most of the statements have not yet become actions, and in the meantime hundreds of businesses are collapsing and so are households,” the forum said in a public plea to the government.

The war compensation package, which includes grants to businesses across the country that have suffered war-related indirect damages, and benefits for employees put on unpaid leave, still needs to be passed by the Knesset. The forum urged the government to immediately activate the grants compensation system, the provision of state-guaranteed loans and other allowances without red tape holding them up.

Business leaders urge government to support war-hit economy

War with Hamas continues to take a toll on the economy

The war with Hamas, which started on October 7 after the Iran-backed terror group brutally murdered some 1,400 people, a majority of them civilians, abducted at least 240 hostages, including babies and octogenarians, and devastated southern communities in a shock onslaught under the cover of a bombardment of thousands of rockets fired at Israeli towns and cities, has taken a heavy toll on the Israeli economy. As a result of the war, the country’s defense forces called up more than 300,000 reservists, many of whom had to leave their jobs and businesses.

The war has also disrupted the normal functioning of many sectors, such as tourism, retail, hospitality, entertainment, and transportation, as well as the supply chains and exports of goods and services. According to the Bank of Israel, the war is expected to reduce the gross domestic product (GDP) by 0.5 percentage points in 2023, and increase the budget deficit by 1.5 percentage points. The bank also warned that the war could have long-term negative effects on the economy, such as lower productivity, reduced investment, and increased poverty and inequality.

Business forum calls for economic resilience and recovery

The business forum, which represents some of the most influential and successful companies in Israel, said that it is time to stop talking and start taking action to ensure the economic resilience of the home front. The forum said that it is ready to cooperate with the government and the relevant authorities to help the economy recover from the war and to restore growth and stability.

The forum also expressed its support for the Israeli Defense Forces and the security forces, and praised their efforts to protect the citizens and the sovereignty of the state. The forum said that it is proud of the Israeli society, which has shown solidarity and resilience in the face of the war. The forum said that it hopes for a swift and decisive victory over Hamas, and for the return of peace and security to the region.

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