Food queues reveal new facts about “Israel”
OCCUPIED PALESTINE, April 11 (YPA) – The threat to the Israeli economy has escalated in recent weeks, foreshadowing a financial crisis for the entity, especially with the resumption of fighting in the Gaza Strip, and particularly with the sources of war funding.
The decision to resume the war in Gaza and bomb Lebanon again was an escalation that led to the return of military attacks against the occupation, both from within the Gaza Strip and by the Yemeni armed forces, which linked the cessation of operations against the Israeli occupation to the cessation of aggression and the lifting of the blockade on Gaza.
According to observers, the return to fighting is negatively impacting growth in Tel Aviv, as the cost associated with recruiting soldiers increases. A study conducted by the Ministry of Finance in 2024 showed that the economic cost of a reserve soldier is approximately 48,000 shekels per month, a significant sum that increases with the number of recruits.
The Bank of Israel and the Ministry of Finance have confirmed that the current government’s priorities are not aligned with the economic challenges facing them. However, the economic collapse has intensified after the Knesset approved the largest budget ever, amounting to approximately 620 billion shekels.
Finance Minister Smotrich acknowledged a budget deficit of 4%, but the actual deficit reached 4.9%. All of this led to a significant increase in Israel’s debt-to-GDP ratio from 60% to 70% in a short period of time.
If the new Chief of Staff, Eyal Zamir, succeeds in his plan to reoccupy the Gaza Strip, the deficit, along with the debt-to-GDP ratio, will rise significantly.
On the other hand, three credit rating agencies have downgraded the occupation’s credit rating, prompting Finance Minister Smotrich to attack these agencies, stating that the occupation’s economic growth will increase, ignoring the fact that political instability is contributing to the rise in debt financing costs.
Israel’s 10-year credit default swaps (in dollars) since January 1, 2023, show that Israeli credit risk began to rise moderately at the beginning of 2023 and jumped significantly with the outbreak of the aggression on Gaza. This rise means that markets are pricing in a greater risk of bankruptcy in Israel, which is heading towards a financial crisis as the occupation will find it difficult to raise debt in financial markets to finance its expenditures (including war expenses).
Observers have confirmed that, for financial markets, the occupation is experiencing a state of security, political, and social turmoil. The High Costs of War
The Hebrew economic newspaper “DeMarker” reported that the costs of the war until the end of 2024 amounted to 124 billion shekels, including military and security expenses, war reparations, and economic losses. It noted that the Israeli Accountant General of the Ministry of Finance refused to publish data on the cost of the war after the beginning of this year.
Yedioth Ahronoth reported on Wednesday that the economic crisis is worsening in Israel, and that thousands of families are waiting to receive food parcels.
The newspaper quoted a statement by Israeli Knesset member Meir Cohen, in which he said that “the food lines are the result of the price hikes imposed by (Netanyahu’s government).” Cohen added that “the government does not realize that there are people in Israel who cannot find anything to eat.”
Last week, Israeli media revealed that 1,700 capitalists had left the Israeli-occupied territories, fearing the recession resulting from the aggression on Gaza and the support operations carried out by Yemen, which have led to great concern among investors and the Israeli settler community in occupied Palestine.
YPA