IMF says Israeli economy will contract in 2025 as war cost balloons past $130M per day
With its genocidal war showing no signs of slowing down, multiple western financial firms have downgraded Israel's credit rating as the country faces the closure of at least 60,000 businesses by the end of 2024
The International Monetary Fund (IMF) has slashed the expected GDP growth for Israel in 2025 from 5.4 percent announced in April to 2.7 percent due to the country’s regionally expanding war and its genocide of Palestinians in Gaza.
“The IMF sees real growth in Israel in 2024 of just 0.7 [percent], which in per capita terms means a decline,” Israeli daily Globes reports.
If Tel Aviv were to stop its war campaign this year, economic growth would remain slow until 2029, when GDP growth could be expected to reach nearly four percent.
According to an analysis by Hebrew daily Yedioth Ahronoth citing official figures and sources, Israel’s war has amassed a total cost of $6.6 billion (25 billion shekels) over the past year, with the daily cost of wide-scale attacks on the Gaza Strip and Lebanon reaching a daily price tag of $133 million (500 million shekels).
The report highlights that the assassination of Hezbollah leader Hassan Nasrallah earlier this month, which saw Israel drop as many as 100 bunker-buster bombs – including depleted uranium munitions – in a highly populated neighborhood of Beirut, carried a price tag of $6.6 million.
A source from the Israeli Finance Ministry who spoke with Yedioth Ahronoth said that a “delay of [a $4.8 billion] aid package from the US until next year” also complicates matters. This alleged delay has reportedly pushed Tel Aviv to implement a third revision of its 2024 budget.
As its genocidal war grinds on, Israel is facing the closure of at least 60,000 businesses by the end of this year due to the deteriorating economic situation. Furthermore, ongoing cancellations by major airlines continue to ravage the tourism industry.
Earlier this month, global credit agency S&P downgraded Israel’s credit rating by two notches, from A+ to A, and estimated zero economic growth for the country this year.
The announcement by S&P followed similar moves by other western credit agencies. Moody’s downgraded Israel’s rating by two levels back in September, saying “geopolitical risk has intensified significantly.” Weeks earlier, US financial services firm Fitch also downgraded Israel’s credit rating.