The conflict with Hamas has dealt an unprecedented blow to the Israeli economy.

At a factory in southern Israel, an air raid siren warns workers that they have seconds to take shelter and stay safe from Palestinian rockets. A frequent situation in this plant, where safety doors are manufactured, and this is detrimental to production.

With the warning lifted, workers at the Rao-Bariach Group, Israel’s largest manufacturer of security doors, return to production.

The situation at the plant, located in Ashkelon, 10 km from the border with the Gaza Strip, is a good example of the current state of the Israeli economy since the outbreak of war with the Palestinian Islamist group Hamas in October. 7, which operates subject to conflict.

“It’s part of our reality,” says the company’s CEO, Aidan Ju-Aretz.

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“We are short of hands. Some employees were recruited by the army and others were transferred to other areas for security reasons,” explains the manager, who estimates that the company employs 60% to 65% of its regular workforce at the factory. ., which had 600 employees.

The group’s head of international development, Ravid Brosh, said warning sirens sounded frequently at the start of the war.

Despite the Israeli Iron Dome anti-missile system, on October 10 a rocket pierced the roof and landed on the walkway leading to the manufacturing workshops.

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According to Israeli officials, after the initial shock following an attack by Hamas in Israel that killed nearly 1,200 people, the country began to foresee new problems emerging from the conflict.

The government mobilized some 360,000 evacuees to fight the onslaught in the Gaza Strip, where the Hamas government, which controls the Palestinian territory, says Israeli strikes have killed more than 12,300 people, most of them civilians.

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In addition, at least 125,000 people were forced to flee their homes in the south of Israel or in the north, near the border with Lebanon, due to gunfire between the army and fighters from the pro-Iranian group Hezbollah, an ally of Hamas.

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Israel is used to crises, but Benjamin Bentel of the Taub Center think tank said conflicts in recent years have been “relatively minor compared to the present.”

Some sectors were more affected than others.

“Construction is at a standstill,” Bendall said, explaining that the operation was dependent on Palestinian workers whose work permits had been revoked by the conflict.

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The hospitality and restaurant sector was weighed down by low consumer sentiment and a sign of prevailing concern was that the volume of credit card transactions in Israel fell 10% and posted a 20% drop since the ground offensive in Gaza began in October. 27.

Several research centers have predicted cuts to expected growth this year and next due to the conflict, but Israel’s central bank remains optimistic and expects the economy to expand 2.8% in 2024.

The resilience of the technology sector, which accounts for 18% of GDP, will be decisive. According to a survey of 500 companies in the sector in late October, 70% said they had canceled orders and important projects since the start of the war.

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For Bentel, if the conflict extends to northern Israel, the panorama will change completely.

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“It’s very difficult to assess what this means, other than that it’s going to be terrible,” the expert said.

Israeli Prime Minister Benjamin Netanyahu has warned that the war will be “long and hard,” so the conflict is predicted to involve billions of dollars in additional public spending.

Last month, a group of 300 economists wrote a letter to Netanyahu condemning him for not understanding “the scale of the crisis facing Israel.”

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