As the global economic landscape faced headwinds in 2023, Israeli businesses navigated through a challenging year marked by a slowdown in the tech sector, political unrest, and an unexpected war with Hamas. In light of the country’s current hurdles, Eran Mordechai, CEO of Danal Human Resources at Danel Group, shared his insights on the trajectory of the Israeli economy and potential scenarios for 2024.
Current Crossroads and Government Response
“Currently, the economy is at a crossroads leading to stagnation,” Mordechai emphasized, expressing concern about the slow government reaction and the absence of organized solutions for affected industries. “The labor market post-war depends on the end date of the conflict and the economic plan to assist small and large businesses,” he added.
The CEO highlighted two potential scenarios for 2024. “If there is strong and significant economic support from the state – we can survive the crisis and move from a deficit to a state of growth and workers recruitment in various sectors of the economy,” Mordechai stated. Conversely, without substantial support, he warned of the potential for “massive layoffs and the economy will sink into deep recession.” The timing of the conflict resolution and the economic plan’s effectiveness will play a crucial role in determining the trajectory of Israel’s economic recovery.
Extended Impact into 2024
Mordechai also raised concerns about the war’s potential spillover into 2024. “If the war extends into the first quarter of 2024, it will affect the entire year because the economic market takes time to recover,” he explained. Sectors such as the hotel and tourism industry are particularly vulnerable due to the continued occupation of evacuees, preventing them from entering the economic whirlwind.