The Israeli army summoned more than 360,000 reserve forces, representing 3 quarters of these forces estimated at 465,000. They are essentially labor workers in many important industries, which caused a noticeable decline in them since the start of the war last October 7.
The Ministry of Finance’s forecasts indicate that the GDP loss for the current year amounts to 1.4 percent, and the political leadership hopes that the war will not last for several months.
Reserve return plan
On November 20, Israeli army spokesman Daniel Hagari confirmed, during his daily statement, that there were demobilizations of reserve soldiers, even though the war on Gaza had not yet ended.
Hagari said: “The army decides the size of the reserve forces in the battle, and we are making calculations regarding some of the number of these forces whose members are returned home, depending on several factors,” attributing one of the reasons for this to “keeping the economy in good condition, to be able to continue fighting.”
The Washington Post reported last week that most senior leaders agree that within a month or two, Israel can withdraw its forces from city centers and form smaller attack brigades around Gaza City, for example, to attack fighters. Hamas” when they came out of the tunnels.
Threats to the economy
Political analyst and military expert, Kamal Al-Zaghoul, indicated to Sky News Arabia that Israel must rearrange its priorities regarding forces, by clarifying the losses that Israel was surprised by as a result of using this large amount of reserves:
- Israel needs to return its reserve soldiers to be able to operate its economy, especially in ports and commercial establishments; To ensure the continuous flow of goods so that you can repay the loans you recently obtained.
- Israel borrowed $6 billion to finance its war on Gaza from international investors through American banks, and is paying returns on some bonds at very high costs compared to paying on previous bonds, even though it obtained a billion dollars in donations from Americans.
- Weapons factories rely heavily on engineers and a workforce in the reserve army, and the contribution of the production of these weapons to the economy is more than 9 percent, in addition to the sensitivity of working with the factories, which secretly depend on the reserve forces.
- The need to stabilize investors and prevent them from escaping the unsafe environment.
According to Zaghul’s assessment, these matters will force Israel to do two things: not to expand the war or prolong it; So you don’t have to keep reserve forces.
“The economy is in an existential war”
In turn, the Israeli economic newspaper “The Marker” revealed last week that “each month of war may lead to a loss of gross domestic product of about 9 billion shekels ($2.4 billion), in addition to the fact that the pace of economic growth this year will reach only 2 percent.” Note that previous expectations indicated that it would reach 3.4 percent.”
The newspaper considered that “the economy is entering into an existential war; the labor market is disrupted, and business sectors are in a state of uncertainty, which affects economic activity and causes multi-dimensional damage to the economy.”
The US Bloomberg Agency also said on November 23 that the war costs amounting to $48 billion are forcing Israel to resort to debt for financing.
Last October 29, JPMorgan Chase expected the Israeli economy to contract by 11 percent on an annual basis in the last three months of this year, with the escalation of the war in the Gaza Strip.
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