An Israeli economist predicts a recession is imminent as war leaders issue ominous warnings.

• Over 360,000 reservists were called up by Israel's military, removing them from the workforce.
• A recession is almost guaranteed, a top Israeli economist predicts.
• Hamas will face a "prolonged conflict" with Israeli Prime Minister Benjamin Netanyahu, according to the latter.

Near the Gaza border, Israeli troops are gathered in large numbers after Hamas's terrorist attacks resulted in the deaths of 1,400 people.

Despite the ongoing air strikes in Gaza for over a week, no ground invasion has started yet, surprising many military analysts. Officials predict a prolonged conflict with Hamas. Additionally, the war has caused uncertainty in Israel's economy. Over 360,000 reservists, who form the core of Israel's Defense Forces, are currently serving and absent from their work.

Joseph Zeira, a renowned economist, ex-Hebrew University professor, and author of "The Israeli Economy: A Tale of Triumph and Expenses," stated that the economic consequences of such an event would be felt instantly.

Zeira predicts that a recession is almost certain due to the decline in productivity in many parts of Israel.

Israelis are not venturing outside to dine or shop as tourism has ceased, according to Zeira.

What’s the economic fallout?

The financial world is paying attention, too.

Fitch has placed Israel's long-term debt on a negative rating watch, indicating that it may lower the credit rating.

The likelihood of other hostile actors, including Iran and Hezbollah, becoming involved in the conflict with Israel has increased significantly, as evidenced by ongoing skirmishes on the Israel-Lebanon border and statements from top officials in both Iran and Hezbollah.

Indeed, Prime Minister Benjamin Netanyahu on Thursday warned of a “prolonged conflict.”

Gaza's complexity has slowed down Israel's next phase of winning wars by striking fast and hard inside enemy territory. Army officers and the government fear that a ground invasion in the south, where Gaza is located, could lead to Hezbollah launching an invasion from Lebanon in the north.

Zeira, the economist, is also worried about a protracted fight.

The longer this conflict lasts, the more devastating it will be for the economy, but the military must proceed cautiously to minimize casualties," he stated. "I am uncertain how the government will resolve this issue.

The Ministry of the Economy in Israel was unable to determine which economic sectors were most affected by the loss of reservists, but it is known that the majority of those who joined the fight are under 40 years old. This younger population has a significant impact on Israel's technology economy, which accounts for approximately one-third of its exports and one-fifth of its annual GDP.

How are Israeli companies reacting to the war?

Israel's tech sector is being significantly affected by the war.

Varonis, a cybersecurity company based in Israel, has a significant portion of its workforce reporting for military duty. Its main campus is located in Herzliyah, north of Tel Aviv. Recently, when Israel went to war with Hamas, Varonis instructed its 750 Israel-based employees to work from home.

Read more: How Israeli’s tech community is responding to the war

CNBC reported that Chief Operating Officer Guy Melamed stated in a telephone interview that our office was temporarily transformed into a home for 250 people who had recently fled towns near Gaza, with the provision of mattresses, pillows, food, and clothes.

Social workers were brought in by the company to assist panicked survivors, while also providing activities for children.

Melamed stated that although nobody in the group had prior experience in the hotel industry, they were able to leverage their high-tech expertise to forecast metrics and facilitate the process.

With government assistance, the 250 evacuees have relocated to hotels over the past few days. Melamed stated, "We were able to provide some relief in a difficult situation."

It seems that the war may not be a brief issue for Varonis and other Israeli businesses.

At a funeral for a civilian killed in a Hamas attack, former Minister of Defense Benny Gantz, now part of Israel's "war cabinet," warned that the conflict may take months to resolve, similar to Israel's 2006 war with Hezbollah in Lebanon, which lasted 34 days.