The daily cost of Israel’s war on the Gaza Strip is rising with the escalation in fighting intensity and the multiplicity of fronts to include the West Bank, southern Lebanon, Yemen, Syria, and partly Iran, amid expectations of more expenses.
When calculating the daily cost incurred by Israel as a result of the war, we can point out that data from the Bank of Israel and the Israeli Ministry of Finance showed that the cost of the war from the seventh of last October until the end of March 2024 amounted to more than 270 billion shekels ($73 billion). At an average rate of $427 million per day.
Data from the Israeli Ministry of Security indicated that the daily cost of the war from October 7 until the end of December 2023 amounted to one billion shekels per day ($270 million), before it decreased during the year 2024 to reach 350 million shekels ($94 million). million dollars).
In another estimate, Israel raised the defense budget last June from 87.45 billion shekels ($23.52 billion) to 98.75 billion shekels ($26.56 billion), which is approximately equivalent to 72.76 million dollars per day.
The expert in Israeli affairs, Ahmed Al-Bahnasi, told Al Jazeera Net that it is not possible to rely on specific numbers so far, whether official or unofficial, to accurately determine the daily cost incurred by Israel in the war, but he pointed out that the reduction of credit rating agencies, the most recent of which was Standard & Bors points out that there is a critical crisis in Israel’s economy with the increasing cost of the war, and worse than that, there is no horizon for stopping the war.
Raise expectations
The Israeli economic newspaper Calcalist reported this week that the occupation army updated its forecasts and raised its total estimate of the cost of the war from 130 billion shekels ($37 billion) to between 140 and 150 billion shekels (about 39.5-42.4 billion dollars).
She pointed out that these costs do not include the possibility of launching a ground operation in Lebanon or a direct confrontation with Iran, which means that the cost may rise further if an additional escalation occurs.
The newspaper’s report indicates that the original estimates issued 3 months ago, prepared by Brigadier General Gil Pinhas, financial advisor to the Chief of the General Staff, estimated the cost of the war at about 37 billion dollars, but with the continuation of the war and the escalation of tensions in the region, these estimates were updated and may raise them. To more than 42 billion dollars.
Direct expenditures since October 7, according to Calcalist, include about 129 billion shekels ($36.4 billion), including:
- 37 billion shekels ($10.4 billion) is spent on the salaries of reserve soldiers.
- 29 billion shekels ($8.2 billion) on ammunition and weapons.
- 19 billion shekels ($5.4 billion) on aircraft, ships and maintenance work.
- 13 billion shekels ($3.7 billion) on weapons.
- Another NIS 13 billion ($3.7 billion) on logistics.
- 8 billion shekels ($2.3 billion) on communications and intelligence systems.
- 6 billion shekels ($1.7 billion) on infrastructure and civil support.
- 4 billion shekels ($1.1 billion) for treatment, rehabilitation and support for families.
Expanding the budget
As a result of the economic repercussions and consequences of the war, the Israeli government was forced to expand the general budget for the year 2024, reaching 584 billion shekels ($158 billion), an increase of about 14% compared to the original spending limit that was set last year as part of the 2023-2024 budget.
To confront the high cost of the military operation and in order to prevent the cumulative deficit in the Ministry of Security’s general budget, the budgets allocated to the Ministry of Security were increased, adding 30 billion shekels ($8.1 billion), bringing the total size of the security budget during the war to about 100 billion shekels ($27 billion).
Due to military spending and direct losses to the Israeli economy, there was an increase in the state’s debt costs to reach 62% of the occupation’s GDP, after it was 59% in the year 2022/2023.
The size of the budget deficit as of the end of last March amounted to 6.2% of the gross domestic product, and the deficit is expected to continue growing to reach about 6.6% by the end of 2024, according to data from the Accountant General of the Israeli Ministry of Finance.
World Bank data indicate that Israeli military spending rose from $190.2 million in 1960 to $23.41 billion in 2022.
Budget deficit
Since the beginning of this year, a cumulative deficit of 26 billion shekels ($7 billion) has been recorded in the general budget, noting that in the last 12 months this deficit reached a new record of 117.3 billion shekels ($31.7 billion), which is the highest in the state’s history.
Regarding the damage and losses resulting from the exposure of the Israeli home front to missile bombardment, estimates by the Israeli Tax Authority showed that the amount of direct damage to buildings and facilities incurred by the “Gaza Envelope” settlements amounted to 1.5 billion shekels ($405 million), according to data from the Israeli Tax Authority.
It is evident from the Tax Authority’s reports that the value of indirect damages and compensation for those affected in the settlements of the Cover and the Western Negev reached 12 billion shekels ($3.35 billion), which includes losses and damages incurred by branches of agriculture, domestic tourism, entertainment, restaurants and cafes, and light industries.
As for damage and losses in the Upper and Western Galilee, the Israeli border towns with Lebanon, and the occupied Golan, there are no official data and damage inventory by the tax authority, due to the seriousness of the conditions and the fighting with Hezbollah.
Estimates indicate that the size of the initial losses in the north of the country as a result of Hezbollah missiles is estimated at about two billion shekels ($540 million), as more than 500 residential, agricultural, industrial and commercial facilities were damaged, according to what the Yedioth Ahronoth newspaper reported, which does not rule out that the size of the losses and damages is doubly.
Israeli affairs expert Dr. Ahmed Al-Bahnasi says that the motive behind Israel opening the northern front with Hezbollah is economic, as a large bloc was displaced from the north starting on October 8 with Hezbollah entering the support front for the Palestinian resistance, which stopped economic activities in this region as well. .
Al-Bahnasi adds that Israeli Energy Minister Eli Cohen’s suggestion that he is looking for a loophole to cancel the agreement to share gas fields with Lebanon indicates the possibility of depriving Israel of gas revenues from this region.
Cohen said in statements to Israeli Army Radio last Sunday that what he described as the “scandalous gas agreement” with Lebanon “was a mistake from the beginning,” stressing that he was looking for a loophole to cancel it.
In late 2022, Lebanon and Israel signed an agreement to demarcate the maritime borders between the two countries after indirect negotiations that continued for two years, with American mediation, regarding an area rich in oil and natural gas in the Mediterranean, with an area of 860 square kilometers.
