This position paper examines the most significant economic projections concerning the financial cost of Israel’s genocidal war on the Gaza Strip, as well as its expansion on the northern front into a full-scale confrontation with Hezbollah. It analyzes economic data from the past year, including the costs of military operations, declining economic growth, the growing budget deficit, and rising inflation and foreign debt.
The paper finds that the economic and financial costs of Israel’s genocidal war on Gaza and its expansion into Lebanon will be extremely high, far in excess of those incurred during previous wars on Gaza or the Second Lebanon War in 2006. However, the paper further concludes that, while its impact will be far-reaching and profound, the high financial and economic costs of the war on Gaza did not hinder its continuation or its expansion on the northern front.
The paper also highlights Israel’s declining global image and standing, alongside the growing international protest and boycott movements, which will further impede the recovery of the Israeli economy. It identifies the government’s conduct, the appointment of Bezalel Smotrich as Minister of Finance, and its plans to restrict judicial independence as additional impediments to economic recovery.
Ultimately, however, the paper concludes that, despite the high economic costs of the war, the Israeli economy has not collapsed or declined to a point that threatens its recovery. It may still recuperate over the coming years, particularly with substantial economic support from the U.S. administration, the continued operation of key economic sectors, and a significant rise in arms exports.
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