War on Gaza devastating Israeli economy, forces 46,000 businesses to close

Around 46,000 businesses have been forced to close in Israel since the start of the war on Gaza on 7 October, Hebrew newspaper Maariv reported this week, adding that Israel is now "in collapse".

The report states the ongoing war on the besieged enclave has hit the economy heavily, with many of the companies affected being small businesses.

The CEO of an Israeli credit risk management firm under the name CofaceBdi told the Hebrew paper that other sectors have also been impacted.

"…About 77 percent of the businesses that have been closed since the beginning of the war, which make up about 35,000 businesses are small businesses, with up to five employees, and are the most vulnerable in the economy," Yoel Amir said.

"The most vulnerable industries are the construction industry, and as a result the entire ecosystem that operates around it, ceramics, air conditioning, aluminium, building materials and more," he added, based on their risk ratings.

The report states that since Israel launched its war on Gaza, there has been "almost no foreign tourism," and that "almost no sector has been spared".

One of the hardest hit sectors is the trade industry, including furniture, fashion, houseware items, entertainment and transport.

South and north Israel, which are currently active zones where there is exchange of fire, has forced the agricultural sector to also decline.

In the north, Hezbollah has reacted to Israeli fire and the targeting of civilians, forcing tens of thousands of settlers to leave the area. In Lebanon, tens of thousands have also been forcibly displaced because of Israeli attacks.

Yemen’s Houthi group has since October launched operations to halt or attack Red Sea vessels in support of Palestinians in Gaza.

The attacks on the Israel-linked ships have also contributed to the Israeli economy’s downfall, by forcing ships to take longer routes and limiting revenue at key ports such as Eilat.

According to CofaceBdi, by the end of this year, around 60,000 Israeli businesses are expected to close.

Experts warn that a potential full-scale war with Lebanon, which several Israeli leaders and officials have previously mentioned, could further plunge Israel’s economy into a further downward spiral.

Israel’s war on Gaza has killed around 38,000 Palestinians in Gaza according to the Palestinian ministry of health, with an additional 10,000 people believed to be buried under the rubble.

However, a medical journal in the Lancet states that the final figure could be close to 186,000 people.

The war has wreaked havoc on the enclave and plunged into a deep humanitarian crisis, destroying much of the Strip’s infrastructure.