Editing Economy of Israel (section)

==Challenges==
Despite economic prosperity, the Israeli economy faces many challenges, some short-term and some long-term. In the short term, its inability to duplicate its success in the [[Telecommunications in Israel|telecommunication industry]] in other growing industries hampers its economic outlook. Its inability to foster large multinational companies in the last decade also calls into question its ability to employ many people in advanced industries.<ref>{{cite web |url=http://startup-nation.com/the-book/ |title=What's Next for the Startup Nation? |access-date=15 October 2012 |url-status=dead |archive-url=https://web.archive.org/web/20120819031009/http://startup-nation.com/the-book/ |archive-date=19 August 2012  }}</ref> On the long term, Israel is facing challenges of high dependency on the growing number of [[Haredi|Ultra-Orthodox Jews]], who have a low level of official labor force participation among men. This situation could lead to a materially lower [[employment-to-population ratio]] and a higher [[dependency ratio]] in the future.<ref>OECD Economic Outlook: Israel</ref> The governor of the [[Bank of Israel]], [[Stanley Fischer]], stated that the growing poverty amongst the Ultra-Orthodox is hurting the Israeli economy.<ref>{{cite news|url=https://www.haaretz.com/1.5151647|title=BoI Chief: Haredi Unemployment Is Hurting Israel's Economy|date=22 July 2010|access-date=19 January 2019|newspaper=Haaretz|archive-date=5 June 2020|archive-url=https://web.archive.org/web/20200605205837/https://www.haaretz.com/1.5151647|url-status=live}}</ref> According to the data published by Ian Fursman, 60% of the poor households in Israel are of the [[Haredi Jews]] and the [[Israeli Arabs]]. Together, these two groups represent 25–28% of the Israeli population. Organizations such as The Kemach Foundation, Gvahim, Jerusalem Village, and The Jerusalem Business Networking Forum are addressing these challenges with job placement services and networking events.<ref>{{cite news|url=http://www.jpost.com/In-Jerusalem/City-Front/Helping-business-people-blossom|title=Helping business people blossom|work=The Jerusalem Post|access-date=30 May 2016|archive-date=5 June 2020|archive-url=https://web.archive.org/web/20200605205837/https://www.jpost.com/in-jerusalem/city-front/helping-business-people-blossom|url-status=live}}</ref><ref>{{cite news|url=http://www.jpost.com/In-Jerusalem/City-Front/Made-in-Israel-336194|title=Made in Israel|work=The Jerusalem Post|access-date=30 May 2016|archive-date=5 June 2020|archive-url=https://web.archive.org/web/20200605210117/https://www.jpost.com/In-Jerusalem/City-Front/Made-in-Israel-336194|url-status=live}}</ref><ref>{{cite web|url=http://www.timesofisrael.com/native-and-new-israelis-try-to-bridge-the-immigrant-gap/|title=Native and new Israelis try to bridge the immigrant gap|website=The Times of Israel|access-date=30 May 2016|archive-date=5 June 2020|archive-url=https://web.archive.org/web/20200605205841/https://www.timesofisrael.com/native-and-new-israelis-try-to-bridge-the-immigrant-gap/|url-status=live}}</ref><ref>{{cite news|url=http://www.jpost.com/Israel-News/Employment-agency-for-olim-celebrates-first-career-placement-program-in-Jerusalem-404750|title=Nonprofit Gvahim celebrates first career-placement program for olim in Jerusalem|work=The Jerusalem Post|access-date=30 May 2016|archive-date=5 June 2020|archive-url=https://web.archive.org/web/20200605205835/https://www.jpost.com/israel-news/employment-agency-for-olim-celebrates-first-career-placement-program-in-jerusalem-404750|url-status=live}}</ref><ref>{{cite book|url=https://books.google.com/books?id=HrGZBQAAQBAJ&q=60%25+of+the+poor+households+in+Israel+are+of+the+Haredi+Jews+and+the+Israeli+Arabs&pg=PA227 |title=Israel Country Study Guide Volume 1 Strategic Information and Developments|date= 3 March 2012|publisher=Lulu.com |access-date=28 January 2018|isbn=9781438774657 }}</ref>

===2023 Israel–Gaza war===
After the [[Gaza war]], the Israeli stock markets and currency nosedived. <ref>{{cite web |last1=Kozul-Wright |first1=Alexander |title=Gaza war extends toll on Israel’s economy |url=https://www.aljazeera.com/economy/2024/8/23/gaza-war-extends-toll-on-israels-economy |website=.aljazeera |date=23 August 2024}}</ref> It is estimated that Israel will lose around $400 billion in the next decade and experience a significant economic shock. Ninety percent of this will result from indirect consequences such as reduced investment, labor market disruptions, and hindered productivity growth.<ref>{{cite web |last1=Egel |first1=Daniel |title=From the Ashes of Hamas-Israel War, Can Economics Drive Peace? |url=https://www.rand.org/pubs/commentary/2023/11/from-the-ashes-of-hamas-israel-war-can-economics-drive.html |website=[[RAND Corporation]] |date=28 November 2023}}</ref> On August 2024, [[Fitch Ratings]] downgraded Israel's credit rating. The [[Bank of Israel]] has counted war-related costs from 2023 to 2025 at up to $55.6 billion. Another consequence of the war was that consumer spending dropped by 27%, imports fell by 42%, and exports declined by 18%.<ref>{{Cite news |last=Ivanova |first=Polina |last2=Zilber |first2=Neri |date=2024-02-19 |title=Israel’s economy shrank at 20% rate after outbreak of war |url=https://www.ft.com/content/763bb384-a974-4222-996f-8aecfbc32074 |url-access=subscription |url-status=live |archive-url=https://archive.today/20240427153202/https://www.ft.com/content/763bb384-a974-4222-996f-8aecfbc32074 |archive-date=27 April 2024 |access-date=2024-12-25 |work=Financial Times}}</ref>
=== Wealth Migrate ===
The 2024 [[Henley & Partners]] Report, indicates that around 1,700 millionaires have departed the country since 2023, seeking investment migration opportunities to mitigate risks and explore alternative residency options. The report announced a remarkable 232% increase in investment migration applications from Israeli citizens in 2023.<ref>{{cite web |last1=MARCONI |first1=DAN |title=Israel’s Millionaires Look to Investment Migration to Mitigate Heightened Risks |url=https://www.henleyglobal.com/publications/henley-private-wealth-migration-report-2024/israels-millionaires-look-investment-migration-mitigate-heightened-risks |website=Henley & Partners |date=2024}}</ref> Factors driving this trend include a 5% depreciation in the shekel's value against the US dollar, a 10% decline in real estate prices in Tel Aviv,<ref>{{cite web |title=Tel Aviv drops in global ranking of top 50 wealthiest cities |url=https://www.timesofisrael.com/tel-aviv-drops-in-global-ranking-of-top-50-wealthiest-cities-as-millionaires-decamp/ |website=timesofisrael |date=9 April 2025}}</ref> Israel's growing international isolation, and the financial pressure resulting from the war in 2023.<ref>{{cite web |title=Israel sees 1,700 millionaires leave due to Gaza war |url=https://www.middleeastmonitor.com/20250409-israel-sees-1700-millionaires-leave-due-to-gaza-war/ |website=middleeastmonitor |date=9 April  2025}}</ref>

===Red Sea crisis===
The [[Red Sea crisis]] caused by the Houthi attacks has severely affected the Israeli economy, disrupting shipping routes, increasing costs, and causing job losses. The port of Eilat, Israel's southern gateway, has suffered almost shut down and bankruptcy, leading to requests for government support.<ref name="18July">{{cite web |first=Yusri |last=Mohammed |date=18 July 2024 |title=Suez Canal revenue drops as some shippers shun Red Sea |url=https://www.reuters.com/business/autos-transportation/suez-canal-revenue-drops-some-shippers-shun-red-sea-2024-07-18/ |access-date=18 July 2024 |website=www.reuters.com |publisher=Reuters}}</ref> Half of the port's workers were at risk of losing their jobs.<ref>{{Cite web |last=Agencies |date=20 March 2024 |title=Eilat Port to lay off half its staff due to Houthi attacks stymieing shipping trade |url=https://www.timesofisrael.com/eilat-port-to-lay-off-half-its-staff-due-to-houthi-attacks-stymieing-shipping-trade/ |website=The Times of Israel |access-date=20 March 2024 |archive-date=20 March 2024 |archive-url=https://web.archive.org/web/20240320151427/https://www.timesofisrael.com/eilat-port-to-lay-off-half-its-staff-due-to-houthi-attacks-stymieing-shipping-trade/ |url-status=live }}</ref> Many ships are avoiding the Red Sea and rerouting around Africa, which makes the journey three weeks longer and more expensive.<ref>{{cite web|url=https://www.axios.com/2023/12/14/us-warns-yemens-houthis-stop-red-sea-attacks|title=U.S. warns Houthis to stop attacks in Red Sea|last=Ravid|first=Barak|date=15 December 2023|website=[[Axios (website)|Axios]]|access-date=15 December 2023|archive-date=15 December 2023|archive-url=https://web.archive.org/web/20231215104039/https://www.axios.com/2023/12/14/us-warns-yemens-houthis-stop-red-sea-attacks|url-status=live}}</ref> Insurance costs for ships in the Red Sea surged, with some Israeli ships seeing a  250% increase or being denied coverage altogether.<ref>{{cite web|url=https://www.timesofisrael.com/how-are-houthi-seizures-in-the-vital-red-sea-shipping-lane-impacting-global-trade/|title=How are Houthi seizures in the vital Red Sea shipping lane impacting global trade?|last1=Bonell|first1=Courtney|last2=McHugh|first2=David|date=14 December 2023|website=[[The Times of Israel]]|access-date=15 December 2023|archive-date=14 December 2023|archive-url=https://web.archive.org/web/20231214172124/https://www.timesofisrael.com/how-are-houthi-seizures-in-the-vital-red-sea-shipping-lane-impacting-global-trade/|url-status=live}}</ref>
=== Boycotts of Israel ===
On 19 July 2024, the [[International Court of Justice]] released an important advisory opinion stating that countries must not recognize, assist, or support the illegal circumstances arising from Israel's occupation of Palestinian territories. The court declared that all nations must avoid any economic or trade relations with Israel concerning the [[Occupied Palestinian territories]] (OPT) or any areas that could reinforce its unlawful presence there. Additionally, it emphasized the need to take steps to prevent trade or investment activities that contribute to sustaining the illegal situation established by Israel in the OPT.<ref>{{cite web |title=19 JULY 2024 ADVISORY OPINION |url=https://www.un.org/unispal/wp-content/uploads/2024/07/186-20240719-adv-01-00-en.pdf |website=United Nations |date=19 July 2024}}</ref><ref>{{cite web |title=Israel/OPT: Ban EU Trade and Business with Israel’s Illegal Settlements in the Occupied Palestinian Territory |url=https://www.amnesty.eu/news/israel-opt-ban-eu-trade-and-business-with-israels-illegal-settlements-in-the-occupied-palestinian-territory/ |website=Amnesty International |date=4 February 2025}}</ref> 
On May 26, 2023, the [[European Trade Union Confederation]] (ETUC), which represents over 45 million workers and their trade unions across Europe, announced a [[Boycotts of Israel|boycott]] of products made in illegal Israeli settlements in the occupied Palestinian territories. The ETUC emphasized the need for regulatory measures to ban the import and export of goods produced in these illicit settlements by entities within the European Union, as stipulated by EU treaties and international law.<ref>{{cite web |title=European trade union to boycott products made in Israel settlements |url=https://www.middleeastmonitor.com/20230526-european-trade-union-to-boycott-products-made-in-israel-settlements/ |website=middleeastmonitor. |date=26 May 2023}}</ref><ref>{{cite web |last1=Kampmark |first1=Binoy |title=Political labelling: The EU’s legal stance on goods from Israel’s illegal settlements |url=https://www.middleeastmonitor.com/20241026-political-labelling-the-eus-legal-stance-on-goods-from-israels-illegal-settlements/ |website=middleeastmonitor |date=26 October 2024}}</ref>

===2023 Israeli judicial reform===
Following the [[2023 Israeli judicial reform]], banks in the country experienced a significant surge in fund withdrawals, occurring at a rate ten times higher than normal. Executives warned that these political changes could adversely affect the economy, resulting in a decline in the shekel's value and a loss of investor confidence.<ref name="Obel">{{Cite web |last=Obel |first=Ash |title=Report: Bank officials believe $4 billion moved out of Israel in recent weeks |url=https://www.timesofisrael.com/report-bank-officials-believe-4-billion-moved-out-of-israel-in-recent-weeks/ |access-date=2023-02-21 |website=The Times of Israel}}</ref> A report from The Times of Israel on March 5, 2023, noted that as the shekel depreciated against the dollar and euro,<ref name=":14">{{Cite news |last1=Lubell |first1=Maayan |last2=Scheer |first2=Steven |date=2023-02-21 |title=Israel shekel nears 3-year low as judicial overhaul spooks investors |work=Reuters |url=https://www.reuters.com/world/middle-east/israel-finance-minister-smotrich-vows-cenbank-independence-2023-02-21/ |access-date=2023-02-21}}</ref><ref>{{Cite news |date=2023-02-21 |title=Shekel weakest for three years against US dollar |work=Globes |url=https://en.globes.co.il/en/article-shekel-weakest-for-three-years-against-us-dollar-1001438962 |access-date=2023-02-21}}</ref> the Tel Aviv Stock Exchange fell compared to stock markets in the EU and the US.<ref>{{cite web |last1=Scheer and Lubell |first1=Steven and Maayan |title=Tel Aviv shares drop amid Netanyahu judiciary plans, rising violence |url=https://www.reuters.com/world/middle-east/tel-aviv-shares-drop-amid-netanyahu-judiciary-plans-rising-violence-2023-01-29/ |website=reuters |date=29 January 2023}}</ref> Numerous companies, particularly in the technology sector, have withdrawn their investments from Israel, leading to an outflow of over $4 billion in just a few weeks.<ref name="Obel">{{Cite web |last=Obel |first=Ash |title=Report: Bank officials believe $4 billion moved out of Israel in recent weeks |url=https://www.timesofisrael.com/report-bank-officials-believe-4-billion-moved-out-of-israel-in-recent-weeks/ |access-date=2023-02-21 |website=The Times of Israel}}</ref>