In a recent revelation by Israel’s economic newspaper “Calcalist”, the ongoing war Israel is waging on the Gaza Strip comes with a hefty price tag. Preliminary figures from the Israeli Finance Ministry indicate that the war’s cost could escalate to 200 billion Shekels (equivalent to 51 billion USD).
This financial burden, equivalent to a substantial 10% of the Gross Domestic Product (GDP), is predicated on the war enduring for a period of 8 to 12 months, solely focusing on Gaza without the full engagement of Hezbollah and others. The estimate also relies on the rapid reintegration of about 350,000 Israeli reservists back into the workforce. The publication elucidated that half of this enormous cost would be channelled towards defense expenditures, which are estimated to reach around a billion Shekels daily.
The financial fallout extends beyond defense as revenue losses are projected between 40 and 60 billion Shekels. Additionally, Israel is set to incur between 17 and 20 billion Shekels in compensation to companies, and another 10 to 20 billion Shekels for rehabilitation purposes.
In a prior statement, Israel’s right-wing extremist Finance Minister Betsalel Smotrich mentioned that the Israeli government is preparing an economic aid package for the Israeli victims, which will surpass the extent of aid provided during the COVID-19 pandemic.
Israeli Prime Minister Benjamin Netanyahu also affirmed his government’s commitment to assisting all affected parties. Netanyahu emphasized on swift financial assistance, urging to “open the taps and direct the funds to those in need,” reflecting a similar approach adopted during the COVID crisis.
This economic strain underscores a multi-faceted challenge Israel is facing amidst the ongoing conflict. The significant financial resources diverted towards war efforts not only signify a massive economic burden but also highlight the pressing need for a sustainable and peaceful resolution to the ongoing conflict. The comparative emphasis on the larger financial aid amidst the war, in contrast to the COVID-19 pandemic, sheds light on the severe impact the conflict has on the Israeli economy and its populace. The narrative extends to a broader discourse on the economic repercussions of military engagements, urging a re-evaluation of priorities towards fostering peace and stability in the region.
