
World
War with Hamas to cost Israel above $50 billion
Hamas gunmen from Gaza launched the deadliest attack on Israel's civilians in the country's history on Oct. 7 and Israel has since bombarded Gaza with the goal of eliminating the group
FP Staff Last Updated: November 05, 2023 15:31:54 IST
Representational image. AFP
The Calcalist financial weekly said on Sunday that Israel’s war with Hamas in Gaza could cost up to 200 billion shekels ($51 billion), citing preliminary Finance Ministry statistics.
The estimate, equal to 10% of GDP, was based on the war lasting eight to twelve months, being limited to Gaza, with no full participation from Lebanon’s Hezbollah, Iran, or Yemen, and 350,000 Israelis drafted as military reservists returning to work soon.
According to Calcalist, the ministry considers 200 billion shekels to be a “optimistic” estimate. However, the ministry stated that it does not agree with Calcalist’s findings.
Hamas gunmen from Gaza launched the deadliest attack on Israel’s civilians in the country’s history on Oct. 7 and Israel has since bombarded Gaza with the goal of eliminating the group.
Calcalist said half of the cost would be in defence expenses that amount to some 1 billion shekels a day. Another 40-60 billion shekels would come from a loss of revenue, 17-20 billion for compensation for businesses and 10-20 billion shekels for rehabilitation.
Finance Minister Bezalel Smotrich has previously said Israel’s government was preparing an economic aid package for those impacted by Palestinian attacks that will be “bigger and broader” than during the COVID-19 pandemic.
On Thursday, Prime Minister Benjamin Netanyahu said the state was committed to helping everyone affected.
“My directive is clear: Open the taps and channel funds to whoever needs them,” he said without giving figures. “Just like we did during COVID. In the past decade, we have built here a very strong economy and even if the war exacts economic prices from us, as it is doing, we will pay them without hesitation.”
In the wake of the war, S&P cut its outlook for Israel’s rating to “negative”, while Moody’s and Fitch put Israel’s ratings on review for possible downgrade.