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Hamas war could affect Israel economy

Israeli armuy soldiers deploy at a position near the border with Gaza in southern Israel on October 11, 2023.

Menahem Kahana | AFP | Getty Images

As Israel prepares for what could be a long war with massive humanitarian implications, there are also concerns about how a protracted fight could weigh on the country’s dynamic economy.

Since Hamas militants staged a surprise terrorist attack over the weekend, Israel’s defense forces called up more than 300,000 reservists for duty, an unprecedented number in recent history. Israel’s standing army, air force and navy is is comprised of 150,000 members. 

The reserve force, made up of a cross section of Israeli society, has about 450,000 members, many of which are more experienced in combat than the younger soldiers in the standing army. The reservists are teachers, tech workers, startup entrepreneurs, farmers, attorneys, doctors, nurses, tourism and factory workers.

“The impact is substantial,” said Eyal Winter, a professor of economics at Hebrew University in Jerusalem who has studied the economic impact of Israel’s wars.

The amount of the economic damage, however, will depend on how long the reservists are away from their jobs in the country, which has a population of over 9 million and a gross domestic product of $521.69 billion

“In a case like this, tourism dries up immediately” said Winter. But, he added, “there’s also a major increase in tourism when the fighting ends due to pent up demand.”

Where does the Israeli economy stand now?

What is the impact on Israel’s tech industry?

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