The Israeli army has called up more than 360,3 reservists, representing 465 quarters of these estimated 7,<> forces, mainly workers in many important industries, causing a significant decline in them since the war began on October <>.

The Finance Ministry forecasts that this year's GDP loss will be 1.4 percent, and the political leadership hopes that the war will not last for several months.

Reserve Return Plan

On November 20, IDF Spokesman Daniel Hagari confirmed in his daily statement that there were demobilizations of reservists, even though the war on Gaza was far from over.

"The army decides the size of the reserve forces in the battle, and we are calculating some of these troops that are sent home, depending on several factors," Hagari said, attributing one reason to "maintaining a good state of the economy to be able to continue fighting."

The Washington Post reported last week that most senior commanders agree that within a month or two, Israel could withdraw its forces from city centers and form smaller assault brigades around Gaza City, for example, to attack Hamas fighters when they emerge from the tunnels.

Threats to the economy

Political analyst and military expert, Kamal al-Zghoul, told Sky News Arabia that Israel should rearrange its priorities with regard to the forces, by explaining the losses that Israel was surprised by as a result of using this large amount of reserves:

  • Israel needs to bring back reservists so that it can run its economy, especially in ports and commercial establishments, to ensure the continued flow of goods so that it can repay loans it recently received.
  • Israel has borrowed $6 billion to finance its war on Gaza from international investors through U.S. banks, and pays returns on some bonds at very high costs compared to paying on previous bonds, although it received $<> billion in donations from Americans.
  • Weapons factories rely heavily on engineers and a reserve army workforce, and the production of these weapons contributes to the economy by more than 9 percent, in addition to the sensitivity of working with factories, which secretly rely on reserve forces.
  • The need to stabilize investors and not to escape from the unsafe environment.

According to Zghoul's assessment, these things will force Israel to do two things: not to expand the war and not to prolong it, so as not to have to keep the reserves.

"Economy in War of Existence"

In turn, the Israeli economic newspaper "The Marker" revealed last week that "each month of war may lead to a loss of GDP of about 9 billion shekels ($ 2.4 billion), in addition to the pace of economic growth this year will reach only 2 percent, knowing that previous expectations indicated that it will reach 3.4 percent."

"The economy is entering an existential war; the labor market is disrupted, and business sectors are in a state of uncertainty, which affects economic activity and causes multidimensional damage to the economy," the newspaper said.

Bloomberg also says on November 23 that the $48 billion war costs force Israel to resort to debt for financing.

On Oct. 29, JPMorgan Chase predicted that Israel's economy would shrink by 11 percent year-on-year in the last three months of this year as the war on the Gaza Strip escalated.