Israel’s economy may shrink 11% on an annualized basis in the last three months of the year, JPMorgan Chase & Co. said, as the country’s war with Hamas escalates.
The bank’s initial projections about the economic impact of the conflict, which erupted on Oct. 7 when Hamas militants rampaged through southern Israel, were “too optimistic,” analysts including Nicolaie Alexandru-Chidesciuc wrote in note dated Oct. 27.
It was published roughly 24 hours before Israel began a widely-expected ground invasion of Gaza, which Hamas rules, and Prime Minister Benjamin Netanyahu warned of a “long and difficult” campaign.
The lender’s estimates are among the most pessimistic from Wall Street analysts so far. Investors, though, have already sold Israeli assets heavily. The main stock index in Tel Aviv is down 11% in local-currency terms since Oct. 7, while the shekel has slumped to its weakest since 2012.