The Israeli Ambassador of the UN Danny Danon reacts to the exit of several Israeli hostages on “The Claman Countdown”.
Tel Aviv – Secretary of the American Treasury Scott Bessent And the Israeli finance minister Bezalel Smotrich met last week for “a very impactful meeting” aimed at improving economic relations between Washington and Jerusalem.
The two men “reaffirmed the strong and lasting commitment of the two nations to a strategic economic partnership”, with discussions focused on “the importance of deepening economic cooperation, promoting innovation and strengthening financial and commercial links”, according to a statement from the Ministry of the Treasury.
“It was a big trip, we had a significant meeting with the secretary, who spoke of the force of Israel’s economy, the support of the United States towards Israel at military and economic levels, and the full pressure campaign on Iran,” said Eytan Fuld, spokesperson for Smotrich, Fox Business.
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The secretary of the Treasury, Scott Bessent, meets the Minister of Israeli Finance Bezalel Smotrich in Washington, DC (US Treasury Department)
“It was very important for the secretary to meet Minister Smotrich at the start of his role, just as President Trump met the Prime Minister [Benjamin Netanyahu] Immediately to show the link between Israel and America. It also shows that all doors are open to work together in the coming months and years on all economic issues, “he added.
The economy of the Jewish state was beaten and bruised following October 7, 2023 of Hamas, the massacre and the wars which followed against the Palestinian terrorists in the Gaza Strip and Hezbollah in Lebanon, but showed remarkable resilience.
The gross domestic product of Israel increased to an annualized rate of 2.5% in the fourth quarter of 2024, according to the Central Bureau of Statistics, after having increased to 5.3% during the July-September period and following a contraction of 0.3% in the second quarter.
Overall, the economy increased by 1% in 2024 – exceeding the forecasts of the Israel Bank (BOI) by 0.6% – but down compared to 1.8% in 2023 and 6.3% in 2022, the year preceding the terrorist invasion of Hamas.
The Bank of Israel forecasts GDP growth of 4% in 2025.
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An Israeli national flag flies to half of the staff outside the Tel Aviv Stock Exchange in Israel on November 7, 2023. (Kobi Wolf / Bloomberg via / Getty Images)
Other key indicators remain on solid land, Israel registering an unemployment rate of 2.6% in January 2025 and annual inflation over the previous period of 12 months to 3.8%.
“Surprisingly, the war is not yet over, but Israel has been well out well,” Dr. Alex Coman, an expert in value creation at the Holon Institute of Technology in Israel, told Fox Business.
Nevertheless, he noted that the economy took a major blow as hundreds of thousands of FDI reservists were torn from their work to go fight. The tourism industry actually stops, most international airlines cancel flights in and outside the country, the agricultural industry was essentially paralyzed because foreign workers returned to their country of origin, and large industrial companies in the south and north were forced to stop operations due to the fire line.
“The contribution to the country’s chests has decreased because many companies have closed and the government has spent more for the war effort while collecting less,” said Coman, noting that the government has also spent enormous sums for housing for tens of thousands of displaced people.
“The situation seemed very disastrous, but Israel had very large outings in the cyber, in particular, and very well succeeded with the military industries because these companies are among the only ones in the world which have proven themselves under intensive fires, which led to sales to countries concerned by invasia by Russia or China,” added Coman.
A traveler checks the departure calendar at Ben Gurion airport in Tel Aviv on September 29, 2024. (Gil Cohen-Magn / AFP via / Getty Images)
Nevertheless, there are upcoming challenges, perhaps above all to pay for the reconstruction of the south and northern Israel, which were decimated during the wars against Hamas and Hezbollah, respectively. Jerusalem allocated $ 9.35 billion combined for reconstruction, the funds of which were included in the state budget that its parliament must adopt by the end of March or the government of the law.
The authorities also increased the value added tax on goods and services by 1% on January 1 to help pay the wars, while prices have increased on average from 4 to 6% since October 7, 2023.
Consequently, Coman warned against a potential for “brain flight”. “Because wages in Israel are low and high spending, technological nomads find easy to work in the United States, Europe or even Thailand, where they are welcome because they are very competent,” he said.
Esteban Klor, professor of economics at the Hebrew University of Jerusalem and principal researcher at the Institute of National Security Studies based in Tel Aviv, told Fox Business that a financial recovery will largely depend on the development of the war against Hamas.
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A Boeing 737-800 of the airlines of EL AL Israel 737-800 at the International Airport of Francfurt Rhein-Main in Germany, June 2, 2023. (Fabrizio Gandolfo / Sopa Images / Lightrocket via / Getty Images)
“We are going to start to see a recovery if the intensity of the fighting decreases and it will be more substantial once there is a solution to the Gaza Strip and the stability of the region,” he said.
“The image is quite dark, but the good news is that the economy has not collapsed, as we saw with Russia or Ukraine. But it does not grow and it is a sign that we must think more,” added Klor.
The main Israeli analysts stressed that the meeting between Bessente and Smotrich had implications that extend far beyond the economy, marking a spectacular policy of the spectacular policy of Biden administration.
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Tank of the Israeli army are deployed in an area near the southern border with the Gaza Strip on July 9, 2024. (Jack Guez / AFP via / Getty Images)
The previous American government had unofficially boycotted the Israeli Minister and even planned to sanction him because of his belief in the historic rights of the Jewish people in Judea and Samaria – commonly known as the West Bank – and its support for hard policies intended to fully defeat Hamas in Gaza, whose Palestinian inhabitants have referred to modern labor.
In particular, Smotrich holds the post of Minister of the Israeli Ministry of Defense, responsible by Netanyahu to supervise the civil administration, the organization responsible for the approval of the construction and management of other bureaucratic questions in Zone C of Judea and Samaria, or the West Bank.
