Conflict costing Israel economy- cen bank chief

JERUSALEM, Aug 2, (Reuters) Israel's conflict with Hizbollah is costing the economy up to 1 billion shekels a week and will push up the budget deficit by 0.6 per cent this year, Bank of Israel Governor Stanley Fischer said on Wednesday.

''The direct to hurt to the economy due to the war in the north will be 0.7 to 0.9 per cent of GDP,'' Fischer told a news conference, once the fighting had lasted a month.

Fischer said the Israeli economy was losing 750 million to 1 billion shekels (227.3 million dollar) each week the fighting lasted. Conflict entered its 22nd day on Wednesday.

The central bank governor said that included factors such as tourism losses and lower economic output. He expected another one billion shekels in lost tourism revenues in the months to come.

Fischer estimated the loss in tax revenue at 0.3 per cent of GDP with defence spending rising by the same amount -- combining to push up Israel's budget deficit by 0.6 per cent this year.

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