Gaza War Could Push Slowing Israeli Economy Into Contraction

[Purveyor]

By Calev Ben-David Aug 25, 2014 10:40 AM ET

At the Ashkelon factory of Israeli mattress manufacturer Polyron, the sirens set off by militant rocket fire from the Gaza Strip just 8 kilometers (5 miles) to the south are taking a toll.

“Instead of doing 100 mattresses, you do 50 or 60, having to run five or six times a day to the bomb shelter,” said marketing executive Alon Zimmerman. As a result, sales in July plunged by a third from the same month in 2013, a shortfall Zimmerman estimates will take a year to make up.

While businesses close to Gaza have been hurt worst by Israel’s battle with Hamas and other Palestinian militants groups, the fighting has also deterred tourists and dented consumer spending nationwide. An indicator gauging sentiment among corporate purchasing managers showed economic activity contracted in July for the second month.

Unlike previous conflicts with Hamas or Hezbollah, the Lebanese militant group, Israel entered the fighting in Gaza with an economy already losing momentum: growth slowed in the second quarter as exports slumped due to a strong shekel.

more...

http://www.bloomberg.com/news/2014-08-24/gaza-war-risks-pushing-slowing-israeli-economy-into-contraction.html

[Jefferson23]

1. Their tourism brochure has lots of new photos too..thousands, actually. n/t

[bemildred]

2. Israel Shekel Weakens as Bonds Rise After Central Bank Rate Cut

Israel’s shekel weakened and bonds rose after the country’s central bank unexpectedly cut its base rate for a second straight month in an effort to boost an economy hit by slowing exports and the seven-week war in Gaza.

The shekel declined 1 percent to 3.5670 against the dollar at 5:27 p.m. in Tel Aviv, the lowest level since Nov. 25. The yield on the nation’s debt due March 2024 dropped eight basis points to 2.56 percent, a record low, while the TA-25 benchmark index closed 0.9 percent higher, the strongest advance in more than a month.

Had it not been for the war, “it would be hard to imagine that the Bank of Israel would have taken such an extreme step, especially at a time when the U.S. is already talking about raising rates,” Ramat Gan-based Ofer Klein, head of economics and research at Harel Insurance & Financial Services Ltd., said in an e-mailed note. “We’re convinced the rate won’t stay this low for a long time, and when global interest rates start moving upward around the middle of 2015, the rate in Israel will rise too.”

http://www.bloomberg.com/news/2014-08-25/israel-shekel-weakens-as-bonds-rise-after-central-bank-rate-cut.html

[bemildred]

3. Gaza war takes luster out of Israel's diamond trade show

The Israel Diamond Exchange is postponing next week's customized diamond sales event in Ramat Gan in the wake of the ongoing conflict in Gaza, the exchange announced Monday.

"In view of the current situation in Israel, we have decided to postpone the International Diamond Week in Israel – September 2014," organizers posted on their webpage for visitors who click on the "Click here to register!" button.
The home page of the Diamond Exchange's website is still counting down to the event, which was due to run September 1-4.

"The Diamond Week has been postponed for both security and insurance reasons," said Ya'akov Kattan, vice-president of the exchange said, according to industry website Rapaport News.

While the resumption of Hamas' rocket launches on Israeli territory was not considered a significant threat to visiting or local diamond traders, Kattan said the adjustments that would have been made for security and insurance purposes would have impeded vigorous trading on the bourse floor, Rapaport reported.

http://www.haaretz.com/business/1.612372