War costs Israel $1 billion a day, jeopardizing its economy
Israel's new phase of conflict with Iran imposes significant financial challenges on the Jewish state's economy.
These additional expenditures further come atop its ongoing war on the Gaza Strip.
Israel's war with Iran is costing Tel Aviv approximately 2.75 billion shekels (equivalent to US$725 million) per day in direct military expenditures, according to a former senior defense official who spoke to the Israeli newspaper Yedioth Ahronoth.
A former financial advisor to the Israeli Chief of Staff, Ram Aminoach, said that losses in the first two days of fighting amounted to approximately 5.5 billion shekels ($1.45 billion), divided equally between offensive and defensive operations, and this estimate does not include damage to civilian property and the broader economic repercussions.
Aminoach said that the offensive operations, which included Israel's first strike on Iran, amounted to approximately 2.25 billion shekels ($593 million), including flight hours and ammunition, while the remaining amount was allocated to defensive measures such as the use of interceptor missiles and the mobilization of reserves.
He emphasized that 'these are only direct costs. The indirect costs—including their impact on GDP—cannot be measured at this stage.'
The Israeli Finance Ministry set a deficit ceiling of 4.9 percent of GDP for the current fiscal year, equivalent to approximately 105 billion shekels ($27.6 billion).
While the budget includes an emergency reserve, most of it has already been depleted during the war on Gaza Strip and does not take into account the war with Iran.
The war led to a downward revision of Israel's economic forecasts – the Israeli Finance Ministry lowered its growth forecast for 2025 from 4.3 percent to 3.6 percent.
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