The war between Israel and Hamas will abruptly slow the Israeli economy this year and next and send the nation’s budget deficit soaring as the country ramps up spending to support the military, civilians and businesses during the conflict, the Bank of Israel said on Monday.
Many businesses have been forced to pause activity, and hundreds of thousands of Israeli reservists are now on active duty, while many people are in shelters. If the war stays on Israel’s southern front, economic growth will cool to an annual rate of 2.3 percent this year and 2.8 percent in 2024 from an expected 3 percent growth pace for both years forecast in August, the bank said in a report after its first monetary meeting since the conflict broke out.
“We knew how to recover in difficult times in the past, and I have no doubt that this will be the case this time as well,” the governor of the Bank of…
