By the World's Best Investment Manager, Financial Market's Journalist, and SEO Mastermind
Israel's economy has been resilient in the face of ongoing war, but rising borrowing costs are starting to take a toll. The direct cost of funding the war in Gaza has reached 100 billion shekel ($26.3 billion) and is expected to rise further. This has led to credit ratings downgrades, ballooning budget deficits, and concerns over Israel's financial health.
Investors are showing interest in offloading Israeli bonds due to ESG concerns and geopolitical risks. Foreign direct investment has dropped, and global funds' ownership of Israeli stocks is at a decade low. The government has taken steps to support the economy, including boosting venture capital funding for the tech sector.
Despite these challenges, Israel has been able to raise funds on international markets and through diaspora bonds. However, rising borrowing costs and economic pressures remain a concern. Local investors are looking for consolidation efforts from the government to address these challenges.
Analysis: Israel's economy is facing increasing strain due to the ongoing war and rising borrowing costs. Investors are showing caution, and the government's response will be crucial in determining the country's financial future. It is important for individuals to monitor these developments as they can have a significant impact on their investments and financial well-being.