Report | Learn about the economic sectors of the occupation most affected by the attacks of the Yemeni Armed Forces

The confrontation between the Yemeni Armed Forces and the Zionist occupation entity is escalating, with Yemen has vowed to respond against the raids that targeted vital facilities in the city of Hudaydah in the west of the country. Statements have emphasized that the confrontation with the “Zionist enemy will be open, without boundaries or red lines.”

Follow-ups – Al-Khabar Al-Yemeni:

The Yemeni forces have vowed not to abide by “any rules of engagement,” stating that they have a list of targets deep within the occupied entity and that “the surprises will be significant.”

Following statements by Yemeni Armed Forces spokesman Yahya Saree, the repercussions on the Israeli entity’s economy, which has been under the weight of the war on Gaza since October 7th of last year, have become apparent.

The Hebrew newspaper Maariv quoted Eilat port CEO Gideon Golber this month as saying, “Work at the port has completely stopped due to ships being unable to reach the port because of attacks by the Yemeni Armed Forces in the Red Sea.”

He added, “Starting in November 2023, the port closed due to the ongoing crisis in the Red Sea, and its activities moved to the ports of Ashdod and Haifa, with a large number of workers being laid off.”

Golber confirmed that the port’s losses amounted to 50 million shekels (14 million dollars), which could increase if Israel does not take action with its allies to stop the attacks.

The Times of Israel mentioned that Yemen’s attacks have disrupted trade coming from the Red Sea, leading to increased shipping costs through longer alternative routes.

Regarding the economic repercussions of the confrontation between Yemen and the occupation, Israeli affairs expert Ahmed Al-Bahnsi states that the economic sectors affected by this confrontation are multiple, but he specifically mentioned:

– Ports, especially the port of Eilat, which reports indicate is suffering from a state of atrophy, according to Al-Bahnsi, who emphasizes the importance of this port from an economic standpoint since it is the only outlet for the occupation on the Red Sea.

– The startup sector is the second main sector that will suffer from the widening confrontations, with official data showing that 44% of startups have fled from the occupied Palestinian territories.

Al-Bahnsi says, “We are not exaggerating when we say that the startup sector represents the nerve center of the occupation’s economy after the facilitations it has provided over the past decades to attract a large number of European, American, and even Asian startups.”

The TA-125 benchmark index on the Tel Aviv Stock Exchange and the TA-35 index for major companies both dropped by 1.1% following Israel’s attack on Hudaydah, Yemen, last Saturday. The Tel Aviv index for the top 5 banks also fell by 1.3% before these indices later recovered some of their losses. The TA-Construction index also decreased by 1.6%, while the TA-Biomed index fell by 2%.

While data on the impact on other economic sectors has not yet been emerged, observers believe that the tourism and construction sectors could also be affected, as mentioned by Al-Bahnsi.

Al-Bahnsi noted that continued Yemeni attacks on ships passing through the Red Sea to the occupied territories necessarily mean ongoing tensions. This situation could provide a reason for an increase in oil prices above current levels, along with rising ship insurance costs that have already increased since last November with the beginning of maritime attacks.

The financial deficit of the occupation widened in June over the past 12 months to 7.6% of the gross domestic product, equivalent to 146 billion shekels ($39.8 billion). This is an increase from 7.2% in May, according to the Ministry of Finance’s Accountant General, Yali Rotenberg, during the current month.

This deficit is now 1% higher than the targeted 6.6% set by the government for the end of the current year. In the past month alone, the financial deficit reached 14.6 billion shekels ($4 billion), compared to 6.4 billion shekels ($1.74 billion) in June 2023.

Since the beginning of the current year, the financial deficit has reached 62.3 billion shekels ($17 billion), compared to a surplus of 6.6 billion shekels ($1.8 billion) in the first six months of 2023.

Government spending has exceeded 300 billion shekels since the beginning of the year, a 34.2% increase compared to the same period last year. The main increase in the deficit is attributed to increased spending on the Ministry of Defense and civilian ministries due to the war.

Even excluding war expenses, government spending has increased by approximately 9.3%, compared to a revenue increase of only 3.3% since the beginning of the year, reaching around 238 billion shekels compared to 230.4 billion shekels in the first half of 2023.

The Ministry of Finance expects the deficit to peak by September before declining.

Source: Al Jazeera