Can Israel’s economy survive an all-out war with Hizbullah?
The country’s banks are experiencing capital flight
![An Israeli soldier walks past a group of young Muslim men in the old city of Jerusalem](https://www.economist.com/cdn-cgi/image/width=1424,quality=80,format=auto/content-assets/images/20240928_FNP503.jpg)
Israel’s economy should have been trundling towards recovery. After all, many of the 300,000 workers who left their jobs to fight have now returned to offices, factories and farms. Instead, a difficult situation is becoming more difficult still. GDP growth came to just 0.7%, on an annualised basis, between April and June, some 5.2 percentage points below economists’ expectations, according to Bloomberg, a news agency. On September 16th Bezalel Smotrich, Israel’s finance minister, had to ask legislators to approve an emergency deficit increase. It was the second time he had made such a request this year.
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This article appeared in the Finance & economics section of the print edition under the headline “On a knife edge”
Finance & economics September 28th 2024
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- A Wall Street state of mind has captured America
- Why the Federal Reserve is split on the future of interest rates
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