Israel's Wartime Economy: Navigating Crisis and Beyond

Since October 7th, Israel has been grappling with the immense economic toll of a prolonged, multi-front war. While the country’s economy has weathered crises before, the past 11 months have pushed its resilience to the limit. Soaring military expenditures, plummeting tourism, and the costs of compensating reserve soldiers and displaced citizens have all taken a toll on economic growth. How much of this turbulence stems from the war itself, and to what extent have policy missteps worsened the situation? More importantly, what does the path to economic recovery look like?

In this episode of Decision Points, David Makovsky is joined by Karnit Flug, Vice President of Research at the Israel Democracy Institute and former Governor of the Bank of Israel. Karnit led the central bank from 2013 to 2018, earning recognition as one of the world’s top central bankers. Together, they discuss Israel’s wartime economy, the challenges ahead, and the resilience of the Israeli people.

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