Israel's economy came under pressure amid the war, with the Melnick Index falling 1.4% on November 23

The Melnick State of the Israeli Economy Index recorded a decline of 1.4% in November 2023, highlighting the profound impact of the Gaza War on economic activity in the corporate sector. The data highlights a decline in the corporate sector of about 2.6% in the first two months of the war, with the GDP growth rate expected to fall to 2.2% for all of 2023.

In October, the sales index for trade and services, an important indicator of domestic demand and private consumption in particular, recorded a significant decline of around 13.8%. This decline reflects the severity observed in the first month of the COVID-19 shutdown and demonstrates the tangible economic impact of ongoing geopolitical instability.

The industrial production index, which shows the supply side of the corporate sector, also recorded a significant decline in October, although less pronounced than the decline in sales. This suggests that the main damage to the corporate sector at this point comes from the demand side. The import index, which largely includes inputs for domestic production, continues to fall, indicating pervasive pessimism about the future growth of economic activity.

Data is still being collected

Currently, the current corporate sector job count does not fully account for the months directly affected by the ongoing war, adding an element of uncertainty to the overall employment landscape. The components of the November Index highlight the economic and challenges facing Israel in these turbulent times. Graphic on the recession economy (Source: PIXABAY)

The industrial production index fell 5.2% in October after falling 4.3% in September. Likewise, revenues in trade and services recorded a 13.8% decline in October after falling 3.9% in September. The import index fell 0.4% in November after falling 5.5% in October. In contrast, the number of jobs in the corporate sector rose slightly by 0.4% in September, after increasing by 0.7% in August.

Given these indicators, the Israeli economy faces a challenging development as the ongoing conflict casts a shadow over various sectors. As stakeholders closely monitor the evolving situation, the path to economic recovery remains uncertain and requires agile policy-making and strategic interventions to address these unprecedented challenges.