Economist Prof. Dan Ben David, argued that the Israeli economy is held together by 300,000 people (the senior staff in universities, tech companies, and hospitals). Once a significant portion of these people leaves, he says, “We won’t become a third world country, we just won’t be anymore.”
So guess what has happened since October 7? People fleeing Israel has increased 285%.

Latest reports of the exodus of Israelis confirms data published two months after the 7 October attack which showed that nearly half a million people left Israel. It also showed a significant decline in the number of Jewish immigrants arriving in Israel. A second survey among Israelis living abroad conducted in March by the Hebrew University on the initiative of the World Zionist Organisation revealed that 80 per cent said that they do not intend to return to Israel.

Israel has less than 10 million citizens, so half a million is a big chunk. You can bet that most of the people leaving are the sort of people Israel needs the most.
The genocidal war continues to have a huge negative impact on the economy.

Data shows that Israel’s economy is experiencing the sharpest slowdown among the wealthiest countries of the Organisation for Economic Cooperation and Development (OECD).

Its GDP contracted by 4.1% in the weeks after the October 7 Hamas-led attacks. And the downturn continued into 2024, falling by an additional 1.1% and 1.4% in the first two quarters...
In its July 2024 forecast, the Bank of Israel revised its growth predictions to 1.5% for 2024, down from the 2.8% it had predicted earlier in the year.

On a related note, Germany and Britain have started suspending arms exports to Israel, which just leaves the U.S. even more isolated.