Bloomberg News

Israeli Minister Says Economy Will Weather Conflict in Gaza

November 19, 2012

Israeli Finance Minister Yuval Steinitz said he expects the economy to compensate for any losses caused by the current round of fighting with Hamas in the Gaza Strip.

“The Israeli economy has shown maturity and stability in previous security crises,” Fischer said at a meeting today with Bank of Israel Governor Stanley Fischer, according to an e- mailed statement from the ministry. “I am convinced the economy will weather the present crisis as well.”

Before the conflict broke out on Nov. 14, the Israeli economy was slowing due to the European debt crisis. The country is dependent on exports, and Europe is one of its largest destinations. The Jerusalem-based Central Bureau of Statistics said yesterday that growth was an annualized 2.9 percent in the third quarter, slower than forecast.

The Manufacturers Association of Israel estimates damage so far of about $30 million from lost work days due to Gaza rocket fire on the south. Some 70 factories shut down completely and another 430 are “hit hard,” the association said in an e- mailed statement.

In the meeting today, Fischer and Steinitz agreed that for now the markets are functioning properly and that investors understand the resilience of the Israeli economy, the Finance Ministry statement said.

“Experience from similar events in the past shows that the economy returns to full activity and even compensates, in the near-to-medium range, for the damage caused in the short term,” the statement added.

To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net; Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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