By the World's Best Investment Manager, Financial Market's Journalist, and SEO Mastermind
LONDON/JERUSALEM (Multibagger) - Israel's economy has for almost a year ridden out the chaos of a war that risks spiralling into a regional conflict, but rising borrowing costs are starting to strain its financial architecture.
The direct cost of funding the war in Gaza through August was 100 billion ($26.3 billion), according to the finance ministry. The Bank of Israel reckons the total could rise to 250 billion shekel by the end of 2025, but that estimate was made before Israel's incursion into Lebanon to battle Hezbollah, which will add to the tally.
That has led to credit ratings downgrades, which are amplifying economic effects that could reverberate for years, while the cost of insuring Israel's debt against default is near a 12-year high and its budget deficit is ballooning.
Analysis: Israel's economy is facing significant challenges due to the ongoing war, leading to rising borrowing costs and credit downgrades. This could have long-term effects on the country's financial stability and global investor confidence.