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The Bank of Israel assessed the consequences of the war with Hamas for the country’s economy

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The “gross impact” of the conflict in Israel was NIS 198 billion ($53 billion), with defense spending accounting for more than half of the total.

The Bank of Israel estimates the economic impact of the war on Hamas at $53 billion. Bloomberg writes about it.

It noted that the “gross impact” of the conflict on Israel was 198 billion shekels ($53 billion), with defense spending accounting for more than half of the total.

Leader Capital Markets previously estimated the fiscal cost of the war at NIS 180 billion by 2023-24, and the Treasury Department said it was costing the economy an estimated $270 million a day.

The Bank of Israel’s own research team also cut its economic growth forecasts and now expects gross domestic product to grow 2% this year and next, down from initial estimates of 2.3% in 2023. and 2.8% in 2024.

The Treasury has the same GDP forecast for this year, but sees slightly weaker growth ahead.

Along with new forecasts on Monday, the monetary committee left the key rate at 4.75%, in line with all forecasts. The shekel strengthened against the dollar after this statement.

The budget deficit is expected to be 3.7% of GDP by the end of the year and 5% by the end of 2024. Inflation by the end of 2024 will be 2.4%. Total defense spending in 2023-2025 is expected to be NIS 107 billion ($28.84 billion).

We remind you that the IMF has not yet assessed the impact of the armed conflict with Israel on the global economy. This is what IMF Chief Economist Pierre-Olivier Gurincha said.

As reported, Israel and Hamas have agreed to continue the ceasefire in the Gaza Strip.

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Source: korrespondent

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