The economy of Israel remains "strong and resilient" despite its ongoing armed conflict with Hamas fighters in Gaza, according to an Israeli economic counsellor.
During a solidarity event hosted by the Israel Chamber of Commerce (ICC) on Thursday, Oct. 26 at the Raffles Hotel in Makati City, Israel Economic Mission to the Philippines Head Tomer Heyvi emphasized that Israel's economy is "strong, stable, and based on solid foundations," as it has "demonstrated its ability to recover from difficult periods in the past."
Due to the conflict, the Israeli shekel, the nation's official currency, has weakened against foreign currencies.
Heyvi shared that around 350,000 people, which is roughly 5 percent of Israel's total workforce, were drafted to the military reserve. This has caused shortages in labor and the labor force in some industry sectors.
Foreign workers in southern Israel, mainly from Thailand, Nepal and the Philippines, were also targeted and hit, causing interruptions to agriculture and other sectors, he added.
Moderate to severe damages were afflicted to properties and communities in Southern Israel, mainly to private houses, property, agriculture, and land, caused by air missiles.
More than 100,000 Israeli citizens have been evacuated from the southern border of Gaza and the northern border to safer places.
Given the impact of the conflict, Heyvi remarked that the current economy is adapting to the "new normal," with employees resuming work in offices, and Israeli volunteers flocking to help support farmers and the agriculture sector.
"Regarding shekel depreciation, the Bank of Israel announced a program to sell up to $30 billion in foreign exchange to stabilize the market," said Heyvi.
Its technology sector is also playing a major role in "mobilizing volunteers, providing development of tech solutions, and funding for different causes."
"The Israeli Innovation Authority under the Israeli government has already issued an emergency funding plan extending $100 million in special aid for startups," he added.
The economic counselor also mentioned that the Ministry of Finance will provide grants, with a budget of $1 billion, to businesses hit by the war in a mechanism similarly used during the Covid-19 pandemic.
He also noted that some Israeli companies and businesses were able to swiftly resume operations and meet with their counterparts in the Philippines after the Oct. 7 attacks.
"Israeli companies will continue to work closely with the business partners here in the Philippines and to fulfill the commitments during these challenging times," Heyvi said.
Resilient economy
Other than those quarters that the conflict affected, the economic counsellor said the "Israeli economy gained power back and resilience grew back."
"Prior to the war, the Israeli economy has a current account surplus, a low debt to GDP ratio, and a high foreign exchange reserve, actually one of the highest in the world compared to the size of the Israeli economy," he stressed.
Heyvi noted that exports from Israel saw steady growth over the past 15 years regardless of security conflicts in the area.
The GDP growth rate of Israel by quarter starting from 2005 to 2023 is often negatively affected by military operations, but the economy bounces back in the succeeding quarters.
Data from the Israel Ministry of Finance showed single quarter results in low growth each during the 2006 Lebanon War, Operation Cast Lead in Gaza in 2008, Operation Pillar of Defense in Gaza in 2012, Operation Protective Edge in Gaza in 2014, and Operation Wall Guardian in Gaza in 2021.
"This is why Israel has more than 400 multinational companies that base their research and development (R&D) centers in Israel. They believe in Israel and the Israeli economy," Heyvi remarked.