Why Israel’s economy is resilient in spite of the war

By Michael Ben-Gad, Professor of Economics, City, University of London

Israel’s war in Gaza and more limited conflict with Hezbollah on its northern border with Lebanon is taking a toll on the Israeli economy.

In the final quarter of 2023, Israel’s gross domestic product (GDP) – a measure of a country’s economic health – shrank by almost 20%. Consumption dropped by 27% and investment by 70%.

It’s important to note that these are annualised figures relative to the same period a year ago. The 5.2% drop in GDP from…

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