JERUSALEM, Nov. 23 (Xinhua) -- The Israeli Finance Ministry substantially reduced its annual economic growth forecasts due to the conflict with Hamas, according to a report issued by the ministry on Thursday.
The report stated that the current conflict's impact on the Israeli economy goes beyond any security incident that the country has experienced during the last two decades or more.
After a growth of 6.5 percent recorded in 2022, the report predicts a growth of 2 percent for the current year, down from the 2.7 percent forecast in the previous report issued in June.
It noted that prior to the conflict, the ministry would have revised the 2023 forecast to 3.4 percent, and the conflict alone has an impact of 1.4 percentage points.
Accordingly, the growth per capita forecast for 2023, which stood at 0.8 percent in June, was reduced to 0.1 percent in the current report.
Due to the high uncertainty that marks the conflict, the report presented three scenarios regarding the growth forecast for 2024, ranging from 0.2 to 2.2 percent, depending on the duration and intensity of the fighting. All three possible 2024 growth figures are lower than the previous forecast of 3.1 percent.
The report also predicts an increase of only 0.1 percent in private consumption in 2023, compared to 3.1 percent in the previous forecast, as the sense of security and household incomes are harmed.
Israeli exports and imports are expected to decrease by 0.6 percent and 4.3 percent respectively in 2023, mainly due to a decline in goods exports and a decline in local demand. ■
