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FT News Briefing

Israel’s economy slumps

Feb 20, 2024
11:52
Snipd AI
Israel's economy contracted by 20% after the war in Gaza, Ukraine's retreat from a key town questioned its military capabilities. Analysis of Ukraine's military tactics and OpenAI's business model, including funding challenges for AI projects.
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Quick takeaways

  • Israel's economy contracted by 20% due to ongoing conflict with Gaza, impacting output and credit rating.
  • Ukrainian forces faced setbacks at Deepka due to shortages of weapons and ammunition, raising concerns about military strength.

Deep dives

Israel's economy contracts as conflict with Gaza takes a toll

Israel's economy suffered a contraction of nearly 20% in the last quarter of 2023 due to the ongoing conflict with Gaza. The government's allocation of funds for the conflict, coupled with the departure of over 300,000 reservists from their regular work, has impacted economic output. Additionally, restrictions on Palestinian border crossings have led to a shortage of labor in the construction sector. Moody's downgraded Israel's credit rating, citing concerns about the prolonged conflict's impact on the economy.

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