Israel economy loses $57 billion from Gaza, Lebanon wars, central bank says

The central bank of Israel has reported that the country’s economy suffered losses exceeding $57 billion due to nearly two years of military conflicts, primarily in the Gaza Strip and operations linked to Lebanon.

According to Bloomberg, the economic damage from 2023 to 2025 is estimated at 8.6 percent of GDP, reflecting the heavy financial burden of prolonged military campaigns and security operations.

The report also highlights shifts in trade patterns, with Israeli exports declining to several European Union countries critical of Tel Aviv, while trade relations with other nations have increased during the same period.

At the same time, Israel’s war cabinet has revised the 2026 budget, approving an additional $13 billion in spending to cover rising military costs, signaling continued prioritization of defense.

The report does not include the economic impact of the ongoing conflict with Iran, now in its fourth week, involving Israeli airstrikes and Iranian retaliatory attacks.

The war in Gaza, which began in October 2023, has caused widespread devastation, with more than 72,000 Palestinians killed, around 172,000 injured, and nearly 90 percent of civilian infrastructure destroyed.

Prolonged conflict has placed increasing strain on Israel’s economy through higher defense spending, reduced foreign investment, and disruptions in key sectors such as tourism, technology, and exports.

As multiple conflicts continue and military spending rises, Israel faces growing economic pressure, with long-term recovery likely to depend on regional stability and reduced hostilities.

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