A broad consensus has emerged to the effect that the current fighting in the Middle East between Israel and guerrillas on two fronts will have no major impact on Israel's "robust" economy-if the fighting does not last too much longer.
Consumer activity in the north of the country is down appreciably. Israelis have fled the area. According to a July 26, 2006 Associated Press (AP) report from Jerusalem, the economy of the coastal city of Nahariya was "crushed." The city has an estimated population of 50,000.
An AP reporter's visit to the area revealed only one supermarket open. The reporter was told that the business was losing approximately us$222,000 per week since the fighting began. Rockets had hit as close as 200 yards north and south of the supermarket.
The AP story quoted the chief economist of one of Israel's major banks on the likely economic impact of the fighting. He said that if the fighting lasted only a week or two Israel's GDP would decline by 1.0 percent to 4.5 percent in 2006.
The bank economist also said, "So far the damage is not that big to the Israeli economy. Clearly, all economic activity from Haifa to the north is partially paralyzed. We are talking about 20 percent of Israel's population, 1.2 million."
The International Monetary Fund (IMF), in a prediction made before the conflicts began, said Israel's GDP would grow 4.2 percent in both 2006 and 2007.
The AP said, too, that manufacturing activity and tourism was seriously affected in Northern Israel. And importer/exporter activity was affected by rocket attacks on the port of Haifa.
A report posted by...