War on Gaza may cripple Israel economy
Posted by smeddum on December 29, 2008
|War on Gaza may cripple Israel economy
Mon, 29 Dec 2008 11:41:09 GMT
Economists have warned that the Israeli economy would be threatened if the invasion of the Gaza Strip is prolonged or the scope widened.
Israeli began the launch of massive air strikes on Gaza on Saturday. Over 310 Gazans have so far been killed and nearly 1550 people have been wounded.
The estimated daily cost of the military operations is expected to stand at tens of millions of shekels (dollars).
According to Israeli daily Haaretz, Israeli economists have acknowledged that the costs of the attacks on the Gaza Strip would skyrocket if Tel Aviv calls up large reserve forces or launches a ground attack.
The Israeli Defense Ministry has refused to comment on the warning.
The treasury has also warned that the Israeli stock market is in a bad shape, rejecting the possibility that it may be able to deal with the army in a generous way.
One institutional investor said that the “market will fall apart” if the attacks continue.
The Israeli stock market is in a volatile situation due to the global financial meltdown. If attacks continue, foreign investments are also expected to be hit.
Israeli stocks fell on Sunday due to the continuation of Israeli air raids against Gaza.
Shares in Bank Leumi Le-Israel Ltd. plunged to their lowest in five years.
TA-25 Index decreased 1.43 percent to close at 625.84.
Tel Aviv’s benchmark stock index has lost 49 percent in 2008 — the biggest fall since 1992.