Israeli Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant during a press conference in the Kirya military base in Tel Aviv , Israel, Oct. 28, 2023. Photo: ABIR SULTAN POOL/Pool via REUTERS
Israeli Defense Minister Yoav Gallant on Friday said that while Israel’s economy has taken a hit in the short run amid the ongoing war with Hamas, the economic outlook will be bright as long as the Jewish state defeats the Palestinian terror group.
“The future of Israel’s economy depends on a clear victory over Hamas,” Gallant told Bank of Israel Governor Amir Yaron in a meeting with the country’s central bank chief in the Kirya military base in Tel Aviv.
At their meeting, the two officials discussed the macroeconomic impact of the war, as well as steps Israel’s central bank has taken to ensure the stability of the economy, according to Hebrew media reports.
Such acts have included lowering interest rates and, just days after the war started, selling approximately $30 billion in foreign exchanges to assist the fast-falling shekel, Israel’s currency.
The value of the shekel fell to about 4 per US dollar in the wake of Hamas’ Oct. 7 massacre of over 1,200 people, mostly civilians, across southern Israel. The slaughter launched the current war in Gaza, which is ruled by the terror group and where the roughly 240 hostages seized by Hamas last month are being held. More recently, the shekel’s value has risen and is trading at about 3.7 shekels to one US dollar.
Historically, Israel’s economy has proven to be resilient in the face of global economic downturns. Top economists have attributed this to the fact that Israel’s economy is heavily reliant on the tech sector — tech has accounted for 14 percent of jobs in Israel, about a fifth of economic output, and roughly half of Israeli exports. In general, tech has been able to endure global crises and even seen positive impacts.
Additionally, Israel has a strong tourism sector that draws in millions of Jews, Christians, and Muslims eager to see their religions’ holy sites — many of them located in Jerusalem. During a time of war, tourism typically declines significantly but returns after a cessation of hostilities.
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