According to the report stated by Channel 12 by inspecting the effect of the war in Gaza on the economy of Israel, the Bank of Israel has released a comprehensive estimate, projecting that around NIS 210 billion will be spent on war-related expenses in the period of 2023 to 2025. This forecast sheds light on the substantial economic impact of the conflict in Gaza on Israel.
Israel has already invested around NIS 24.7 billion ($6.6 billion) of the state funds in several aspects of the war, since the very beginning of the war. The war-related expenses encompass a range of factors, including defence costs across all borders of Israel, funding for over 100,000 people who were evacuated from the north and south of the country, and also the provision of humanitarian aid.
The horrors of October 7 shook the entire world, affecting the victims who faced it. For the mental and physical health care for victims of the horrifying happenings of October 7 when Hamas killed almost 1,200 people and 240 people were kept as hostages, Israel has reserved around NIS 930 million.
The government of Israel has allocated considerable resources to ensure the nation’s security, leading to high defence budgets and subsequent implications for the overall fiscal balance. The Channel 12 report also adds that the repairing and restoring cost of the destroyed communities along the border of Gaza will on an estimate reach up to NIS 400 million and around an aggregated sum of NIS 250 million will reach to restore the damage up north due to the cross border attacks from Lebanon.
The government is expected to implement measures aimed at taking the edge off the economic impact. The rebuilding of infrastructure in the aftermath of the conflict is also anticipated to be a key driver of the estimated expenses of the war.