The ongoing war between Israel and Hamas has taken a heavy toll on the economy of both sides, as well as the region and the world. According to a recent report by the Bank of Israel, the business sector’s production is expected to decrease by 3.8% in the fourth quarter of 2023, compared to the previous quarter. This is mainly due to the disruptions caused by the rocket attacks, the airstrikes, the civil unrest, and the lockdowns imposed to contain the spread of the coronavirus.
The report also estimates that the war will reduce the annual GDP growth rate of Israel by 0.7 percentage points, from 4.1% to 3.4%, in 2023. The direct costs of the war, such as the damage to infrastructure, property, and human lives, are estimated at 12 billion shekels (about 3.7 billion dollars), while the indirect costs, such as the loss of productivity, consumer confidence, and tourism, are estimated at 15 billion shekels (about 4.6 billion dollars).
The war has also affected the trade and investment flows between Israel and its partners, especially in the Middle East and Europe. According to the Israel Export Institute, the exports of goods and services from Israel to the Arab countries have declined by 18% in the first 10 months of 2023, compared to the same period in 2022. The exports to the European Union have also declined by 12% in the same period. The foreign direct investment in Israel has also decreased by 25% in the first three quarters of 2023, compared to the same period in 2022.
The war has also had a negative impact on the economy of Gaza, which is controlled by Hamas. According to the World Bank, the poverty rate in Gaza has increased from 53% in 2018 to 64% in 2023, while the unemployment rate has increased from 52% to 60% in the same period. The war has also worsened the humanitarian situation in Gaza, where more than 2,000 people have been killed, 15,000 injured, and 100,000 displaced since the outbreak of the hostilities in October. The war has also damaged or destroyed more than 20,000 buildings, including homes, schools, hospitals, and mosques, and disrupted the access to water, electricity, and health services.
The international community has been trying to broker a ceasefire and a political solution to end the war and alleviate the suffering of the civilians on both sides. The United Nations, the United States, the European Union, Egypt, Qatar, and Turkey have been involved in the mediation efforts, but so far, no agreement has been reached. The main obstacles are the demands of Hamas for the lifting of the blockade on Gaza and the recognition of its legitimacy, and the demands of Israel for the disarmament of Hamas and the cessation of its rocket attacks.
The war has also raised the risk of a wider regional conflict, as it has inflamed the tensions between Israel and its neighbors, such as Iran, Syria, Lebanon, and Jordan. The war has also increased the instability and violence in the West Bank and East Jerusalem, where the Palestinians have been protesting against the Israeli occupation and the expansion of the settlements. The war has also sparked anti-Israel and anti-Semitic demonstrations and attacks in several countries around the world, especially in Europe.
The war between Israel and Hamas is not only a tragedy for the people directly involved, but also a threat to the peace and prosperity of the region and the world. The war has shown the urgent need for a lasting and comprehensive solution to the Israeli-Palestinian conflict, based on the principles of justice, security, and coexistence. The war has also shown the importance of dialogue, cooperation, and solidarity among the nations and the peoples of the world, to prevent and resolve the conflicts that endanger the human dignity and the common good.
