'Israel' Mulling Demobilizing Reservists Over Economic Woes

By Al Mayadeen English

17 Nov 2023 23:00

The Israeli occupation forces might be letting go of thousands of Israeli reservists as the economy suffers in light of the war on Gaza.

The security establishment is considering the possibility of reducing the number of reservist soldiers and demobilizing some of them. 

Israeli media explained that this comes in the aftermath of "the damage their absence from their homes and workplaces has caused to the economy."

Israeli settlers are leaving their homes in the Gaza envelope and northern occupied Palestine due to their fear of the Resistance on both fronts, with a massive wave of displacement taking place in a way that has destabilized the already unstable economy.

A difficult political discussion in "Israel" has been sparked by the mounting financial cost of the war on Gaza, which will pose challenges to Prime Minister Benjamin Netanyahu and his Finance Minister, Bezalel Smotrich.

The Israeli occupation has been overspending on everything from weapons to paying the hundreds of thousands of reservists it called up. In addition, declining household spending and tourism are contributing to a decline in fiscal income.

A dispute about payments to ultra-orthodox schools and other causes supported by right-wing members of Netanyahu's ruling coalition has arisen as a result of the strain on other budgets like religious schools in the occupation.

There is pressure on Smotrich, a lifetime settler, to reduce such spending. Anything that isn't "essential to support the fighting," according to him, will be removed.

The Israeli regime has successfully raised approximately 30 billion shekels ($7.8 billion) in debt since the start of its aggression on Gaza, as reported by the Finance Ministry on Monday.

Out of the total amount, around 16 billion shekels were raised through dollar-denominated debt in international markets, highlighting the Israeli occupation's efforts to seek financial support on a global scale.

In addition to this, the Finance Ministry conducted a weekly bond auction in the local market, resulting in the acquisition of an additional 3.7 billion shekels.

Due to the prolonged aggression on Gaza, "Israel's" economy is predicted to contract by around 1% this year, and the country's debt to GDP ratio is predicted to surpass 65%, central bank governor Amir Yaron stated on Thursday.

In a live-streamed discussion regarding monetary policy, Yaron stated, "Assuming the war is primarily concentrated in the southern border, and lasts till the end of this year, GDP growth is likely to shrink by about 1% in 2023."

The Israeli Finance Ministry announced on Wednesday that the occupation's budget deficit for October was 22.9 billion shekels ($6 billion), citing an increase in costs associated with financing "Israel's" war on the Gaza Strip.