No, you pointed out that many companies are bailing out of Israel. Which I did not dispute.
On the other hand, a war economy generates its own spending to largely offset those losses as you pointed out. And this spending is cushioning the short-term impact of the businesses leaving the country.
Meanwhile, the vacuum caused by businesses leaving will free up resources for other endeavors and that is the part of your piece, I disagree with... call it the "net effect" vs "gross impact".
This "net effect" is highlighted by the fact, that even in the midst of all the negatives you highlighted, the economy is expected to grow this year and next year it is expected to grow faster than the US economy.
Just today, the Bank of Israel updated its 2024 GDP forecast. "The Bank of Israel on Monday lowered its growth forecast for the country, on the assumption that the war in Gaza will continue at a higher intensity and for longer than previously thought."
The central bank revised its GDP growth forecast down to 1.5 percent in 2024 and 4.2 percent in 2025. The previous forecast in April anticipated growth of two and five percent respectively.
“The department assumes that the war will continue at a higher intensity until the end of 2024, and will wind down in the beginning of 2025,” bank governor Amir Yaron said in a statement.
This paints a picture of an economic slowdown, rather than a recession which your piece seems to convey. I found your article interesting at the granular level, but the overall message conveyed an economy that was collapsing when in fact it is expanding at least if the 2024 and 2025 GDP forecasts by the Bank of Israel are accurate and while like every forecast, they are subject to evolving conditions, they do incorporate all known information at this time along with an expectation that the war will continue with greater intensity than its earlier forecast had baked into it.
I was hoping to get some great buys on Israeli stocks but in spite of the short-term challenges you noted, they are outperforming both our NASDAQ and S&P 500 this year... go figure.
