Israel’s war effort is giving its economy a Covid-like shock. #Bloomberg

From small restaurants to high-tech companies and a major gas field run by Chevron Corp., Israeli businesses are being convulsed by the war against Hamas.

Many are comparing the shutdowns that have hammered the $520 billion economy to the Covid-19 pandemic, with schools, offices and building sites emptying or opening for only a few hours a day. Israel mobilized a record 350,000 reservists before its ground offensive on Gaza, draining roughly 8% of the workforce.

The military call-ups and partial economic freeze have triggered a sudden crash in activity and upended everything from banking to agriculture. They’re costing the government the equivalent of $2.5 billion a month, according to Mizrahi-Tefahot, a top Israeli lender. The central bank’s warned the impact will worsen the longer the conflict lasts.

Israel declared war on Hamas — which the US and the EU designate as a terrorist organization — when it rampaged through southern communities on Oct. 7, killing around 1,400 people. Thousands of Palestinians have died in retaliatory airstrikes on Gaza, the Mediterranean enclave ruled by Hamas.

The financial toll is already severe. Israeli stocks are world’s worst performers since fighting erupted. The main index in Tel Aviv is down 15% in dollar terms, equivalent to almost $25 billion.

The shekel has slumped to its weakest level since 2012 — despite the central bank announcing an unprecedented $45 billion package to defend it — and is heading for its worst yearly performance this century. The cost of hedging against further losses has soared.