Netanyahu should heed the advice of Israeli economists and revise the budget to account for the war.

• A group of prominent Israeli economists is urging the government to implement significant economic reforms promptly due to the prolonged conflict with Hamas.
• The Israeli Economists' forum called on Prime Minister Netanyahu to reopen the government's budget.
• According to Itai Ater of Tel Aviv University's Coller School of Management, any expenditures in the budget that do not relate to the war or the necessary rebuilding must be re-evaluated.

The government is being advised by hundreds of influential Israeli economists to make significant economic changes promptly, such as reopening the budget, in order to prepare for the continuation of the conflict with Hamas, which is now in its fourth week.

The Israeli Economists' Forum's letter, released Monday, urges Prime Minister Benjamin Netanyahu and Minister of Finance Bezalel Smotrich to address the challenges facing the Israeli economy.

The recent war with Hamas has forced more than 200,000 Israelis, primarily from the south, to relocate, resulting in a significant expense that was not accounted for in the government budget. As a result, economists are urging Israel to make an unprecedented move by reopening the 2024 budget, which was passed in May following a contentious political battle.

According to Itai Ater of Tel Aviv University's Coller School of Management, who heads the Israeli Economists' Forum, any expenditures in the budget that do not relate to the war or the necessary rebuilding must be re-evaluated.

The war has resulted in significant economic consequences, including the mobilization of 360,000 reservists, which is over 10% of Israel's workforce. Additionally, many businesses have shut down due to the conflict, leading to labor shortages and a negative impact on the national mood.

The letter advises that Israel must undergo a significant shift in its priorities and allocate a substantial amount of funds to address the damage caused by war, assist the victims, and revive its economy.

The conflict has shifted to Gaza, with Israel launching attacks from various fronts following the devastating terrorist attack on Oct. 7, which resulted in the deaths of 1,400 Israelis and the capture of over 200 hostages by Hamas militants.

Israel has also faced criticism on its northern borders with Lebanon and Syria, although not as intensely as before.

What's the forum's goal?

The 300-economist forum, founded in January, warned the government of the dire economic consequences of Netanyahu's judicial reform. However, the divisive political fight has been replaced by a devastating and costly war that most Israelis never imagined.

The forum's letter emphasizes that cosmetic changes to the current budget are insufficient to address the crisis of this magnitude. The government must act quickly and restore citizens' confidence in its ability to handle the challenges.

Ater suggested that lowering the financial support for "non-core education" in ultra-Orthodox Jewish communities could be a good starting point, although this was not directly mentioned in the letter.

The funding for ultra-Orthodox or Haredi schools in Israel is a contentious issue due to the significant influence of their population on Israel's government. Ultra-Orthodox parties have frequently been a deciding factor in forming or strengthening a coalition in the Knesset. To secure their support, politicians, including Netanyahu, have been accused of providing generous government funding for their schools.

Ater stated that the Economists' Forum is seeking the bare minimum necessary to prevent the economy from collapsing, but he believes that more will be required if the conflict escalates.

The Ministry of Finance has not yet responded to the letter.