Preliminary estimates indicate that the US-Israeli war on Iran has cost the Israeli budget approximately 35 billion shekels ($11.52 billion), including 22 billion shekels allocated to the security sector, with the amount already incorporated into the 2026 budget, according to the Israeli Finance Ministry.

In a statement on Sunday, the ministry confirmed that the government had approved additional emergency allocations in mid-March worth 2.6 billion shekels ($827 million) for urgent weapons procurement as the confrontation escalated.

According to the ministry’s estimates, the increased spending is expected to raise the fiscal deficit from the previously targeted 3.9% of GDP to a range between 4.9% and 5.6%.

The ministry also assessed that economic losses resulting from the war on Iran were around 9 billion shekels ($2.93 billion) per week.

Israeli wars strain its economy

In the same context, media reports citing Channel 12 said that the cost of 40 days of war on Iran and Lebanon could reach approximately $17.5 billion, including both military and civilian expenditures.

The Israeli Finance Ministry has estimated that the wars on Iran and Lebanon have cost “Israel” approximately $17.5 billion over the past 40 days, Anadolu reported on Thursday, citing Channel 12. The figure reflects combined military and civilian expenditures amid ongoing escalation on multiple fronts.

Direct military spending is estimated at around 40 billion shekels ($12.9 billion), while civilian costs, including compensation for affected businesses and local authorities, are projected at 13–14 billion shekels ($4.2–4.5 billion), bringing the total to roughly 54 billion shekels ($17.5 billion).

The ministry noted that the figures remain preliminary and do not account for future reconstruction costs or broader economic losses caused by the partial shutdown of the economy. To support military needs, an additional 7 billion shekels ($2.3 billion) has been allocated, covering weapons procurement, flight operations, reserve duty, and war-related damages.

Compensation under property tax is estimated at 12–13 billion shekels, alongside 1 billion shekels allocated for unpaid leave schemes and support to local authorities. As of Thursday morning, 28,237 claims for direct damage had been filed, with the highest numbers reported in Tel Aviv, Bir al-Sabe’, Arad, Petah Tikva, Dimona, and Beit Shemesh.

Meanwhile, Israeli media reported about two weeks ago that fuel prices had surpassed 8 shekels per liter, triggering growing public anger amid mounting economic pressures.

According to Israel’s i24NEWS, the increase was driven by a surge in global oil prices, with crude exceeding $100 per barrel compared to around $70 at the beginning of the year, directly impacting gasoline prices in the domestic market.

'Israel's' continuous wars strain its economy

"Israel’s" latest estimate of roughly $17.5 billion for 40 days of war on Iran and Lebanon demonstrates a growing strain on the entity's economy. The cost follows the 2024 wars on Gaza and Lebanon, which together reached about $31 billion, pushing war spending far above budgeted levels and contributing to a widening deficit.

Even short wars have left a mark: the 12‑day war on Iran in June 2025 led to GDP losses of around 1%, as economic activity slowed and business operations were disrupted. The cumulative impact of these wars since 2023 now exceeds $100 billion, when direct military spending and indirect costs such as lost productivity and reduced investment are combined.

Beyond military expenses, the repeated wars have affected Israeli households and businesses. Increased security spending has crowded out public investment, reservists’ mobilization has delayed business plans, and uncertainty has weakened consumer and investor confidence.

Economists warn that if such engagements continue, growth could slow further. Rising borrowing costs, reduced investment, and ongoing uncertainty show that the economic consequences of "Israel’s" conflicts extend far beyond the battlefield, highlighting the high cost of sustained military campaigns.

Source:Websites