The new round of Palestinian-Israeli conflict has made the economies of many countries in the Middle East ＂worse＂

　　The new round of Palestinian-Israeli conflict has lasted for more than a month. High-intensity conflicts not only bring serious humanitarian disasters, but also seriously impact the regional economy, making the already difficult economies of many countries in the Middle East "worse".

　　The Palestinian economy was hit hard.

　　At the end of October, the United Nations Conference on Trade and Development (UNCTAD) said that Gaza’s economy had been "hollowed out" for many years. By the beginning of October, about 80% of the population had depended on international aid, and the impact of the new round of conflict on the local economy was incalculable.

　　According to UNCTAD’s annual report, 2022 is "one of the worst years of Palestinian economy in recent years" due to the intensified tension between Palestine and Israel and the long-term stagnation of the peace process. The Palestinians are forced to rely on Israel economically. "Excessive production and transaction costs and trade barriers with other parts of the world lead to a long-term trade deficit in the Gaza Strip, and there is a general and unilateral dependence on Israel.".

　　The persistent conflict has severely damaged the infrastructure in Gaza. At the same time, the Israeli side indicated in early November that it would transfer part of the tax collected to the Palestinian National Authority, but withheld the funds originally allocated by the latter to the Gaza Strip.

　　According to the Paris Economic Protocol signed by Palestine and Israel in 1994, Israel is responsible for levying tariffs on goods shipped to Palestine, and collecting personal income tax on Palestinians working in Israel, and transferring the tax to Palestine on a regular basis. As a means of putting pressure on the Palestinian side, Israel has "cut off supply" several times before.

　　The Israeli economy has been hit.

　　According to a recent survey released by Israel’s Central Bureau of Statistics, the impact of this round of conflict on the country’s enterprises is mainly manifested in the decline in demand for products and services, labor shortage, supply and logistics difficulties. The data shows that about 51% of Israeli enterprises have lost more than 50% of their income, and about 57% of small enterprises with 5 to 10 employees are "seriously losing money".

　　Gad lior, an Israeli media analyst, pointed out that the expenditure on military operations and the compensation for property losses caused by the conflict will further increase the financial burden of the Israeli government. Lior predicted that the Israeli economic growth rate will drop to about 2.5% in 2023.

　　At the same time, the conflict hit investor confidence. In the last month, Israel’s financial market has been in turmoil. The benchmark index TA-35 of Tel Aviv Stock Exchange in Israel fell sharply. The exchange rate of the Israeli currency, the new shekel, continued to fall against the US dollar, prompting the Bank of Israel to sell 30 billion US dollars of foreign exchange reserves to stabilize the exchange rate.

　　The three major international credit rating agencies downgraded Israel’s credit rating outlook or issued relevant warnings respectively. Standard & Poor’s downgraded Israel’s sovereign credit rating outlook from "stable" to "negative"; Fitch put Israel’s "A+" long-term foreign currency and local currency issuer default rating on the negative watch list; Moody’s warned that Israel’s sovereign credit rating may be downgraded.

　　The economies of neighboring countries were dragged down.

　　Analysts pointed out that the Palestinian-Israeli conflict is constantly producing spillover effects, which brings many uncertainties to the economic development of regional countries.

　　Tourism is one of Egypt’s main sources of foreign exchange income. The continuous escalation of the Palestinian-Israeli conflict not only impacts the country’s tourism industry, but also causes the exchange rate of the Egyptian pound against the US dollar to fall all the way, pushing up the inflationary pressure in Egypt. Ramona Mubarak, head of business risks in the Middle East and North Africa at Fitch Solutions, pointed out that the negative emotions brought about by this round of conflict have dragged down the Egyptian economy.

　　Muhammad Shukel, president of the Association of Industry, Agriculture and Commerce in Beirut and Mount Lebanon, said that since the new round of conflict, Lebanon’s economy has deteriorated sharply, the supply pressure of food and other necessities has increased, and the catering and car rental industries have shrunk dramatically. In addition, the shipping business of Beirut Port has also been affected.

　　Jordanian economic analyst Ilham helmi said that the Palestinian-Israeli conflict has had a negative impact on Jordan’s tourism and other industries, and the participation of tens of thousands of Jordanians in demonstrations and rallies in support of Palestine has also affected the country’s daily economic activities.　　

　 　 　 　Xinhua News Agency reporter Zhang Jian Li Rui(Participating in reporters: Ji Ze, Zhang Tianlang)