Israeli technological sector, a key part of the economy, has suffered from labor lack and funding fears, which could lead to a greater slowdown in 2024.
At 6:45 am, October 7, Jack Bigio, founder of UBQ Materials technological company, spoke with his operating director, who said the terrorists were in his kibutz. Other employees wrote messages that were hiding in safe rooms, and one said her husband was injured in the abdomen.
"It was like a judge day," Mr Bigio said.
Hamas attack on Israel forced UBQ Materials to close its plant, located 20 miles from the border with gas. Two employees were killed. Many lost their homes and were relocated to 100 miles.
Founded in 2012, UBQ Materials uses technology that converts household debris to a plastic substitute used for the manufacture of tables, chairs, trays of McDonald's and automobile parts for Mercedes-Benz. The company has been able to start work within three weeks, but many others face constant problems with operations and financing.
According to the Ministry of Health of Gaza, which does not distinguish between the death of civilians and militants, Israel has killed about 23,000 Palestinians since October 7. About a million evacuated territories fled south. The strip has undergone starvation; violation of water supply, electricity and communication networks; and limited health care as many hospitals have been damaged.
As a result, according to the Organization of Economic Cooperation and Development, the war will cause a "temporary but pronounced slowdown" of Israel's economy. It increased by about 3 percent to attacks on October 7, and now it is expected that it will slow down to 1.5 percent this year. The lack of labor, lower confidence of consumers and businesses, as well as high inflation.
Other anxiety is caused by foreign investments, which were already weak by October 7, due to the uncertainty caused by the dispute between Prime Minister Benjamin Netanyahu and the Supreme Court of Israel, Jonathan Katz, the former economic prognosis of the Ministry of Finance, said.
"Now the question is whether foreigners will want to invest in Israeli high technology, whether they will prefer to invest their money in some safe and quiet place, such as Ireland," said Mr Katz.
To stimulate the decline of the economy, last week the Israeli Bank reduced the interest rates by a quarter of a point up to 4.5 percent. It was the first decrease in the rate since the beginning of the Covid pandemic, and the head of Central Bank Amir Yaron stated that additional abbreviations are expected.
"Lack of budget adjustments now by reducing expenditures, eliminating unnecessary ministries and increasing revenues in view of the needs of war, will probably cost the economy much more in the future," Mr. Yaron said.
The war in gas, one of the longest, ever-respected by Israel, is already reflected in the whole economy.
Construction, which is 14 percent of Israel's economy, has slowed through the lack of labor. Although volunteers joined, the departure of foreign workers and the loss of Palestinians have led to the fact that fruits and vegetables were to rot in trees and fields.
Ben-Jhuda shops worked until the north at the end of December, when American tourists visited them during the winter holidays and Christmas holidays, said Moshe Saudi, who worked in a souvenir shop. Now they are closed early.
