Netanyahu's Statements on Stifling Isolation Spark Concerns in Israeli Markets

SadaNews Economy- The Tel Aviv Stock Exchange experienced a strong jolt today following statements from Israeli Prime Minister Benjamin Netanyahu, in which he clearly acknowledged that Israel is engulfed in "political isolation" that will force it to adopt an economy with "autarkic characteristics," meaning a closed economy that relies on self-sufficiency in the face of isolation from global markets.

The Israeli economic newspaper Calcalist described the atmosphere in the markets as "gloomy," as the "Tel Aviv 125" index dropped by 1%, the oil and gas index plummeted by 2.2%, while shares of military industries suffered heavy losses, with Elbit losing 2% of its value and Next Vision tumbling by 4%.

Statements Reveal an Existential Dilemma

Netanyahu admitted before the General Accountant Conference in Jerusalem that Israel may soon face stifling isolation, stating: "We will need to be an economy with autarkic characteristics. We might find ourselves in a situation where our arms industries are besieged," adding that his country is forced to turn into "Athens and Super Sparta."

These statements reflected a loss of confidence in the ability to maintain economic openness and served as a direct warning to investors that a phase of sharp downturn has indeed begun.

Rapid Market Collapses

The repercussions extended to other sectors, with the share of NewMed Energy losing 2.4%, while Aluma Infrastructure's shares fell by 12.9% following Bezeq's announcement of a deal cancellation, which Calcalist described as evidence of "eroding confidence in the Israeli economy."

These collapses were not mere momentary fluctuations but reflected, according to experts, a "loss of direction" afflicting the economy under the weight of international isolation and the constriction of global markets.

Unconvincing Justifications and Harsh Criticism

Netanyahu attempted to justify the collapse by blaming "Muslim minorities in Europe" who pressure their governments to take a tougher stance against Israel, stating: "This creates many negative sanctions and restrictions on Israel and limits our ability to import spare parts for weapons." However, his critics argue that the real reason lies in failed government policies and war management that have deepened the isolation.

The technology sector was the most vehement in its criticism, as the "High-Tech Forum for Israel" issued a statement saying that "high-tech, the central growth engine of the economy, depends on international markets and foreign investor confidence. The current closure threatens our technological and military advantages, and instead of ensuring stability, Israel is descending into a dangerous reality of isolation and loss of competitiveness," sarcastically asking: "Is this Netanyahu's dream? To go back to selling oranges?".

A Dark Future on the Horizon

According to Calcalist, figures clearly reveal that the Israeli economy is heading towards a historical deadlock, with an inflated fiscal deficit exceeding 5% of GDP, and a collapse in the confidence of local and international investors.

While Netanyahu tries to convince public opinion of the necessity of "economic autarky," analysts believe that this approach reflects an inability to confront reality, placing Israel on a path of long-term economic contraction that could lead to the collapse of essential sectors, particularly defense and technology industries.