As Israel’s conflict with Hamas and Hezbollah intensifies, the economic repercussions are becoming increasingly severe. The prolonged war has not only strained the nation’s resources but also cast a long shadow over its economic stability. There are multifaceted economic impacts of Israel’s widening war, we examine here the immediate and long-term consequences for various sectors and the broader implications for the region.

The immediate economic toll of the conflict is evident in several key areas. Defense spending has skyrocketed, with the Bank of Israel estimating that costs arising from the war will total 250 billion shekels ($66 billion) through the end of next year. This includes military outlays and civilian expenses, such as housing for thousands of Israelis forced to flee their homes in the north and south.

The escalation has also led to a significant downgrade in Israel’s credit rating. Moody’s Investors Service recently downgraded Israel’s credit rating from A2 to Baa1, citing growing geopolitical risks and the prolonged conflict with Hezbollah in Lebanon. This downgrade reflects the increasing uncertainty and risk associated with investing in Israel, which could deter foreign investment and exacerbate economic instability.

High-Tech Industry: Israel’s high-tech industry, a cornerstone of its economy, has shown resilience but is not immune to the conflict’s effects. The sector has faced disruptions due to the mobilization of reservists, many of whom are key employees in tech firms. Additionally, venture capital investments have slowed, as investors become wary of the heightened risks associated with the ongoing conflict.

Tourism: Tourism, another vital sector, has been hit hard. The Central Bureau of Statistics reported a more than 75% decline in tourism, leaving many businesses in popular tourist areas struggling to survive. The once bustling........

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