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00:00 It seems that the conflict is in the Middle East, which is striking the Israeli economy.
00:08 The financial-sector agencies are opening their eyes again about the natural dangerousness
00:15 of the economy there.
00:16 In the previous time of this conflict, specifically after October 7, Moody's had placed Israeli
00:25 dollar bonds in a non-favorable position.
00:29 Today, these S&P opinions are included, which evaluate the view and move it from a stable
00:37 to a negative one, with the balance of the financial sector, of course, at the level of
00:42 the pensioners.
00:43 There are several factors that will push the financial-sector agencies to reconsider
00:48 one day after the other the nature of the danger and the Israeli government debt.
00:53 One of the most prominent reasons is the geopolitical tensions.
00:57 The view has been lowered from a stable to a negative one, with the balance of the financial
01:02 sector at a high level, at the level of the A-A.
01:05 The agency estimates that the Israeli economy, which has been in a slump in the fourth quarter
01:10 of this year, will reach 5% as a result of security problems and the lack of commercial
01:15 activity, the closure of many vital ports and the qualification to enter a military
01:21 war, perhaps the length of which will be long.
01:24 The agency also estimated that the government's lack of capacity to increase military spending
01:30 will increase by 3% or 5.3% as a result of the general analysis in 2023, and its effects
01:37 will continue until 2024.
01:39 The reason is also that spending on military, in addition to supporting families and companies
01:46 and raising the spending of family defense, which has been damaged by a stop in its work
01:52 and is also suffering because of this war, which seems to be going to last longer.
01:57 The B-90 says that the negative economic impact of the Gaza war will lead to or will
02:03 be reflected in the following.
02:05 The decrease in labor power after the Israeli army called for nearly 320,000 soldiers
02:12 to be evacuated, but the response was not enough for more than 20% of them.
02:17 These numbers were not qualified to enter a land attack because it was working as a
02:23 police or an internal police force only in Israel.
02:28 The energy sector through the suspension of gas production in the Tamar field and its
02:32 effects will begin to appear in the fourth quarter.
02:34 The tourism sector, of course, suspension of air travel and the closure of airports and
02:38 the reduction of local and foreign investment after the exit of a lot of money from Israel,
02:44 or even from foreigners, inside the occupied Palestinian lands.
02:50 The agency also finds that there are factors that will reduce the negative economic impact
02:55 of the Gaza war, including the continuation of the export of advanced technology services
03:00 and the ability of employees to work from home.
03:03 This means that the work will not be completely disrupted.
03:05 Also, the adjustment of government debt to reach 60% of the total amount, while large
03:10 economies such as the United States and Japan exceed 100% and 10%.
03:15 We do not forget the foreign reserves of the Bank of Israel, which reach almost $200 billion
03:20 and is equivalent to 1.4 times of the foreign debt, and this is considered a financial
03:25 power for the Israeli economy.
03:28 We still have the news about the expectations that the agency has about the nature of these
03:34 risks.
03:35 The agency expects the economic recovery to return in the first quarter of 2024, but
03:41 it will be limited to 0.5% and will be compensated in 2025 by 5%.
03:47 The agency expects that the repeated benefits of the current account will be achieved by
03:52 4% of the total amount from 2023 to 2026.
03:58 But until now, the danger is still acute in the Israeli economy due to the extent of
04:04 this conflict.