Israel's economy grew less than expected in the second quarter of this year amid the volatility caused by the war in Gaza.
The country’s gross domestic product expanded by 1.2 per cent in the April-June period, the Central Bureau of Statistics said in an initial estimate on Sunday.
It was below the consensus forecast of 4.4 per cent and the 3 per cent growth estimate from the online platform Trading Economics.
On a per capita basis, Israel’s GDP fell 0.4 per cent in the quarter.
The overall growth was primarily driven by a rise in consumer spending by 12 per cent, investment in fixed assets by 1.1 per cent and government spending by 8.2 per cent, which offset an 8.3 per cent decline in exports.
Israel's economy grew at an annual rate of 2.5 per cent during the first half of this year, compared to 4.5 per cent during the same period last year, the data showed.
The war in Gaza began when Hamas attacked southern Israel on October 7, killing about 1,200 people and taking about 240 hostages.
Israel's retaliation has continued since then, with more than 40,000 Palestinians killed, 90 per cent of the enclave's 2.3 million people displaced and the economy of the Palestinian territories ravaged.
Calls for a ceasefire and hostage release deal have intensified amid fears Iran could launch a retaliatory strike against Israel at any moment following the assassinations of Hezbollah and Hamas leaders.
The likelihood of a full-scale regional conflict increased following the recent assassinations of Hamas leader Ismail Haniyeh in Tehran and senior Hezbollah military commander Fouad Shukr in Beirut.
Iran has threatened “harsh punishment” for Israel, which Tehran has blamed for the Hamas leader's killing.
Last week, Israel’s credit rating was downgraded by Fitch Ratings, which cited concerns around the continuing war and geopolitical risks.
Fitch maintained a negative outlook on the country's credit, indicating the possibility of a future downgrade, after lowering the credit rating from “A+” to “A.”
The agency has projected a budget deficit of 7.8 per cent of GDP in 2024 and expects debt to remain above 70 per cent of GDP in the medium term.
"In our view, the conflict in Gaza could last well into 2025 and there are risks of it broadening to other fronts," Fitch said.
"In addition to human losses, it could result in significant additional military spending, destruction of infrastructure and more sustained damage to economic activity and investment, leading to a further deterioration of Israel's credit metrics," the agency added.
In July, the Bank of Israel lowered the country’s growth forecast from its April projections due to the impact of the war in Gaza, noting that there is still a “long way to go” before the economy returns to normal.
The Israeli economy is expected to grow by 1.5 per cent this year and 4.2 per cent next year, with the central bank's projections cumulatively 1.3 percentage points lower than the April forecast.
In its earlier estimate, the Israeli banking regulator said the estimated cost of the conflict for the period between 2023 to 2025 stands at about 255 billion shekels or 13 per cent of the 2024 forecast GDP, which includes both higher defence and civilian spending, as well as lower tax revenue.
Last month, the International Monetary Fund cut its expansion forecast for Middle Eastern economies on the back of oil production caps and the Israel-Gaza war.
The world economy, which showed resilience last year, is in a “sticky spot” with the slowing pace of disinflation and prospects of a higher-for-longer interest rates regime looming large, the Washington-based fund said in the latest update of its World Economic Outlook.
The IMF maintained its global growth projection for this year at 3.2 per cent and expects the world economy to expand at a slightly faster pace of 3.3 per cent next year.
Hili 2: Unesco World Heritage site
The site is part of the Hili archaeological park in Al Ain. Excavations there have proved the existence of the earliest known agricultural communities in modern-day UAE. Some date to the Bronze Age but Hili 2 is an Iron Age site. The Iron Age witnessed the development of the falaj, a network of channels that funnelled water from natural springs in the area. Wells allowed settlements to be established, but falaj meant they could grow and thrive. Unesco, the UN's cultural body, awarded Al Ain's sites - including Hili 2 - world heritage status in 2011. Now the most recent dig at the site has revealed even more about the skilled people that lived and worked there.
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
The specs: 2019 Haval H6
Price, base: Dh69,900
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Seven-speed automatic
Power: 197hp @ 5,500rpm
Torque: 315Nm @ 2,000rpm
Fuel economy, combined: 7.0L / 100km
COMPANY%20PROFILE
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Queen
Nicki Minaj
(Young Money/Cash Money)
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
Eyasses squad
Charlie Preston (captain) – goal shooter/ goalkeeper (Dubai College)
Arushi Holt (vice-captain) – wing defence / centre (Jumeriah English Speaking School)
Olivia Petricola (vice-captain) – centre / wing attack (Dubai English Speaking College)
Isabel Affley – goalkeeper / goal defence (Dubai English Speaking College)
Jemma Eley – goal attack / wing attack (Dubai College)
Alana Farrell-Morton – centre / wing / defence / wing attack (Nord Anglia International School)
Molly Fuller – goal attack / wing attack (Dubai College)
Caitlin Gowdy – goal defence / wing defence (Dubai English Speaking College)
Noorulain Hussain – goal defence / wing defence (Dubai College)
Zahra Hussain-Gillani – goal defence / goalkeeper (British School Al Khubairat)
Claire Janssen – goal shooter / goal attack (Jumeriah English Speaking School)
Eliza Petricola – wing attack / centre (Dubai English Speaking College)
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
Everton 1 Stoke City 0
Everton (Rooney 45 1')
Man of the Match Phil Jagielka (Everton)
UAE currency: the story behind the money in your pockets
Juventus v Napoli, Sunday, 10.45pm (UAE)
Match on Bein Sports
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
