What is the impact of October 7 on Israel's economy?

Thursday, 2 May 2024 • 7 pm Israel Time|12 am EST

Seventh months into the war, what is the economic impact of the October 7 massacre perpetrated by Hamas and the ensuing military operation in Gaza on Israel’s economy?

According to David Zaikin, founder and CEO of the Key Elements Group, the Jewish state has proven resilient.

“We saw that in the aftermath of the terrorist attack, in light of its impact on sectors like tourism, agriculture, construction, and more in October, November, and December, the GDP lost about 5%, which on an annualized basis stands at about 20%, which is obviously a huge shock to the economy,” Zaikin said in a conversation with The Jerusalem Post editor-in-chief Zvika Klein. “However, if we look at what happened afterward, that is quite interesting.”

Key Elements conducted research comparing the effects of October 7 in Israel and September 11 in the US. 

“We can see that the two crises have several elements in common,” Zaikin said.

The expert explained that the Israeli economy has already shown signs of recovery in recent months.

“The Israeli economy is built on human capital, which represents the long-term resource Israel has been investing in since its establishment in 1948,” Zaikin said. This is the reason its economy has proven to be so resilient.”

According to Zaikin, investors are aware of it, and this is why, since October 7, some $8 billion of Israel Bonds have been purchased, for a total demand of $34 billion.

“As soon as they see that the situation is stabilized, they will invest even more,” he said.