“The decision to gradually open the economy and the various regions is a message of victory over the Iranian enemy,” said Minister of Defense Israel Katz. Yet there are still many uncertainties for the economy, which has been getting one after the other for three years.
The big problem that is currently presenting is that the companies can open again, but that the schools are still staying closed. That means that many people are still glued to home. Older children can also be difficult to leave alone if an Iranian attack is constantly threatening.
Shop
For example, the sight of Tel Aviv, the commercial heart of Israel, but also the most important target of Iran, remains downright sad for the time being. Empty streets, limited public transport and a large number of stores closed. Because who goes shopping when it rains? Most restaurants, a different things are confronted with dusk, so that employees can be on time before the Iranian rocket attacks start. The ‘city that never sleeps’ is in a coma.
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Public meetings were forbidden, but also with the relaxation of the rules, only a maximum of thirty people can come together at the same time. There is no shortage of food since the rush at the supermarkets immediately after the start of the war.
There are, however, concerns about the fuel resources, after an oil refinery was hit in Haifa earlier this week. Energy company Sonol warns of possible disruptions in the fuel supply. Yet a shortage is not expected immediately, in particular because there is little traffic in view of the safety situation. In addition, Israel has emergency reserves.
Military costs
Volens Itai Alter, Professor of Economy at the University of Tel Aviv, is still too early to estimate what the consequences of the war against Iran will be on the Israeli economy. “A lot depends on, among other things, the duration of the war and who arrives as a victor.” He immediately points to the negative consequences of closed workplaces and schools. “In addition, there are of course the direct military costs. It is also difficult to stick to it, but the first fourth days would follow some estimates more than 2 billion euros.”
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The advantage, Alter says, is that the Israeli economy was better than ever at the end of 2022. That started to change with the controversial legal reforms, so that many investors stayed away. This was followed by the massacre of October 7, the wars against Hemas and Hezbollah and now the fight against Iran.
Yet there are also positive messages. The stock exchange in Tel Aviv this week is wonderfully elevator, and the Sjekel also hardly works in strength. Alter: “Investors are hopeful, although I sometimes wonder why. They probably see a quick profit for Israel and then trading deals with Saudi Arabia. But a lot is of course still uncertain at the moment.”