How Israel’s War in Gaza Is Hurting Its Own Economy

Over the last few decades, Israel has transformed itself from a relatively poor agrarian economy to a global startup haven. Its per capita GDP now exceeds that of France, the UK and Japan. But with Hamas’ attack on Israel – which killed 1,200 people and claimed more than 200 hostages – and Israel’s subsequent invasion of Gaza, that economic trajectory could be at risk. Some 360,000 Israeli reservists were called to serve in the military in the days that followed October 7th, destabilizing Israel’s workforce, while economic growth is forecast to have plummeted in the last quarter of 2023. And as Israel continues its invasion of Gaza – a war that has already claimed the lives of more than 25,000 Palestinians, according to Hamas officials – Israel’s military spending is expected to balloon. The country’s just-released 2024 budget calls for $19 billion in war-related expenditures. On today’s Big Take podcast, Israelis involved in building the country’s vibrant start-up ecosystem share their stories of how the aftermath of October 7th has impacted their employees and the community’s operations – and Bloomberg’s Galit Altstein walks us through what it could all mean for Israel’s economic future. Read more: An Isolated Israel Doubles Down on War in Gaza — At All Costs This episode was produced by: David Fox Senior Producers: Naomi Shavin and Gilda Di Carli Editors: Caitlin Kenney and Jordan Fabian Executive Producer: Sage Bauman Sound Design/Engineer: Blake Maples and Alex Sugiura Fact-checker: Adriana Tapia Special thanks to Galit Altstein and Israel bureau chief Ethan Bronner for the reporting that inspired this episode. Have questions or comments for the team? Reach us at bigtake@bloomberg.net.

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