Firms have closed due to Hamas's attack, impacting Israel's economy. Tourism has also come to a halt. The Central Bank has cut its growth forecast from 3% to 2.3%. The economy is vital for the war effort, so policymakers are planning for the challenges ahead. The biggest issue is the lack of workers, with 360,000 reservists being mobilized, putting a strain on the economy and risking financial ruin similar to the Yom Kippur War.
Economists have stopped waiting for interest rates to drop because it doesn’t seem to be coming. The upward pressure on long-term bond yields suggests that this situation could last for a while. How should the world adjust? Israel’s economy might be in good enough shape to withstand the next few months, but a longer war won’t come cheap (12:00). And, Jilly Cooper’s sexy new book (18:55).
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