Barkat: Israel to pursue victory in war regardless of economic impact

Israel is committed to winning the war in Gaza and eliminating Hamas regardless of the economic toll on the country, Economy and Industry Minister Nir Barkat says.

Israel’s $500-billion economy has taken a hit during the more than four-month-old war against Hamas in Gaza, during which thousands of people have left the Israeli workforce and gone to serve in the military.

But Barkat made clear that national security was not only paramount, but also vital for Israel’s economy.

Asked what the risk of a bigger trade deficit and another ratings downgrade might mean for Israel, Barkat tells Reuters: “Look, we’re committed to win the war. We’re going to win the war regardless of anything.”

He says Israel has overcome tougher situations in the past. He adds: “I think when people look at the economy of Israel, they want to make sure, first of all, we’re a secure… country,” during a visit to the United Arab Emirates for a ministerial conference of the World Trade Organization.

Barkat says Israel would borrow in the near-term. This borrowing, compounded with the economic impact of the war, would increase the debt to gross domestic product ratio — a measure of Israel’s ability to repay its debt — from 62% to 70%, he says.