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So how to explain this extraordinary achievement during one of the most difficult periods in the country’s history? After all, it’s clearly an anomaly that even coffee-savvy readers would have had a hard time guessing ahead of time.
I will start with an almost trivial answer: there is no such thing as a free meal. It is obvious that when public companies improve their performance, increase sales and soar in profits, it usually comes at the expense of someone, and that someone is the Israeli consumer.
So, in some cases, this explanation is indeed helpful, such as unexpected gains from the stock exchange, including price increases, or process streamlining at these companies, but neither of these explanations (except for the particular streamlining at Shufersal) is relevant to the second quarter because they did not occur.
What exactly happened? Let’s start with the self-evident explanation, the security crisis made defense companies such as Elbit, Israel Aerospace Industries or companies belonging to the Fimi Investment Fund celebrate. Sales increased, profits soared, but the orders they received from security systems decreased.
The increase in orders is accompanied by an increase in the defense budget, which has come at the expense of an increase in the budget deficit. We will eventually pay for the swollen deficit by raising prices. How did Naomi Shemer write that? If not today, it will come tomorrow, and if not tomorrow, it will be the day after tomorrow.
Next article: The blockade of the country due to a significant reduction in outbound flights has boosted local demand in various fields: tourism and leisure services, communications, food, clothing, shoes and hats, furniture, etc. All trade sectors in these fields have generated unacceptable situations. Benefit from the curfew imposed on us.
Ordinary consumers shifted their shopping to the local market at the expense of export growth. When demand increases and consumers have no other options, prices rise. El Al’s abuse of curfews and market power, turning the national airline into a national predator, was particularly rapacious.
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