Israel’s economy shrank by far more than expected in the wake of conflict with Hamas in Gaza, according to official figures.
Gross domestic product (GDP) – a key measure of a country’s economic health – fell by 19% on an annualised basis in the fourth quarter of 2023.
That is the equivalent of a fall of 5% between October and December.
GDP was “directly affected” by the outbreak of the conflict on 7 October, the Central Bureau of Statistics said.
Israel and Hamas have been at war after gunmen from the Palestinian group launched an unprecedented attack on Israel from Gaza – the deadliest in Israel’s history.
About 1,200 people were killed during the attack. Hamas, which is considered a terrorist group by Israel, the US, the European Union and the UK, also took more than 250 men, women and children hostage.
An Israeli military campaign has followed, which has killed 29,000 people in the Palestinian territory, according to the Hamas-run health ministry there.
Experts said the data released on Monday by Israel’s Central Bureau of Statistics was much worse than had been expected.
The median estimate in a Bloomberg survey of analysts was for an annualised decline of 10.5%.
The Central Bureau of Statistics said the war had sharply curtailed spending, travel and investment at the end of last year.
It said private spending dropped by 26.3%, exports fell by 18.3% and there had been a 67.8% slide in investment in fixed assets, especially in residential buildings. The construction sector suffered from a lack of labour, due to military call-ups and a reduction in Palestinian workers.
Meanwhile, government spending, mainly on war expenses and compensating businesses and households, jumped by 88.1%.
Despite the sharp drop in GDP between October and December, Israel’s economy grew by 2% for the full year.
However, before the 7 October attacks, it had been expected to expand by 3.5%.
Liam Peach, emerging markets economist at Capital Economics, said the contraction of Israel’s economy was “much worse than had been expected and highlights the extent of the hit from the Hamas attacks and the war in Gaza”.
He said the country’s growth outlook for 2024 “now looks likely to post one of its weakest rates on record”.
Elsewhere, the conflict has affected trade. Houthi rebels, backed by Iran, have been targeting cargo ships on the Red Sea that are heading to the Suez Canal.
Egypt’s President Abdel Fattah al-Sisi said on Monday that the attacks had cut Suez Canal revenue by between 40% and 50% this year.
The Red Sea is one of the world’s most important routes for cargo – almost 15% of global seaborne trade usually passes through the area.
The Houthis have been carrying out strikes from bases in Yemen on ships which they claim are Israeli-owned, flagged or operated, or are heading to Israeli ports. However, the owners and operators of many vessels claim they have no links with Israel at all.
The US and the UK have carried out retaliatory strikes on Houthi targets in Yemen in turn.
But even before this, some of the world’s largest shipping companies had stopped their vessels from passing through the strait.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
